This Glossary is meant to help the users to familiarize with the terminology used in the Database. It contains explanations for the terms used to categorize the Competition Laws analyzed. It also contains definition of most common terms used in the competition field.

 A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z
 

A

Abuse of Dominance - Anticompetitive business practices in which a dominant firm may engage in order to maintain or increase its position in the market.

Acquiring Controlling Interests - Takeover: Purchasing a majority of shares, allowing the owner, by electing members to the board, to effecticvely control a company.

Acquiring Share for Reselling - This is generally an investment transaction that does not imply an increase of market power and therefore it is an operation generally exempted by the merger clearance rules.

Active Sales in Exclusive Territory - Agreements that foresee sales made by soliciting individual customers inside another distributor's territory. It is a vertical restriction of competition that can be exempted. See Vertical Agreements.

Agreements on Standards - Firms agree to set standards on the minimum quality of a good to prevent excessive price-cutting which could lead to inferior products and services.See cooperation-exceptions and Horizontal Agreements

Appointment/Tenure - The method of selecting and confirming staff to key appointments in competition regulatory bodies. 

Appointment by President - Members of the Competition Authority are appointed by the President or other heads of state of a country.

Appointment by Prime Minister - Members of the Competition Authority are appointed by the Prime minister or other chief executive of the state.

Appointment and Confirmation by Congress - Members of the Competition Authority are appointed by an executive and then confirmed by an elected legislative body.

Authority or agency - The institution, designed to monitor the market and to enforce competition Law, can be called Competition Authority, Agency, Commission or similar.

B

Barriers to Entry - Prevent or deter the entry of new firms into an industry even when incumbent firms are earning excess profits.

Bid-rigging - Agreements by which firms coordinate their bids on procurement or project contracts. See Horizontal Agreements.

C

Commercialisation Agreements - An agreement between two parties giving one party the rights to market and sell products based on the intellectual property or similar assets of the other.

Compensation - The salary or other method of payment for commissioners and staff.

Competences with relation to other regulatory agency - Degree of inter-institutional cooperation between the national competition authority and other agencies. The regulatory agency has exclusive jurisdiction over the regulated sector in question or both regulatory agency and competition authority have jurisdiction over the regulated sector with or without overlapping of functions but with a precise definition of the division of labor between the two. 

Competition Advocacy - Competition advocacy refers to those activities conducted by the competition authority related to the promotion of a competitive environment for economic activities by means of non-enforcement mechanisms, mainly through its relationships with other governmental entities and by increasing public awareness of the benefits of competition.

Conflict of Interest - When participation or affiliation with a company, either official or unofficial precludes a member of the Competition Authority from being able to make a fair judgement on cases brought in front of him/her.

Consent Order - "consent order" is made when both parties agree to the terms of the order and then the judge signs off on it.

Contact information - Address, email, contact person of the Competition authority in a particular Country. If a Competition Authority is not present, the focal point for competition in the Government will be listed.

Cooperation Agreements - Cooperation agreements are legal exceptions to anti-collusion laws that allow companies to work together with mostly positive results for the market.

Cooptation - Members of the Competition Authority are recruited from a similar institution.

Coverage - The territory and sectors to which the Competition Law applies. The law can have effects in the country (if the law applies to the acts or to the results of them done within the geographical borders of the country) or it can have extraterritorial application (the law applies to acts or to the results of them done outside the geographical borders of the country). 

CSC - Substantially lessen competition.

Customer/market allocation - Agreements to avoid competition that would drive down prices. Companies may agree to compete for different niche customers. See Horizontal Agreements.

D

De Minimis Mergers - Mergers of minor importance in many jusrisdictions do not need to be examined by the authorities.

Discriminatory practices, dissimilar conditions to equivalent transactions - Used as synonymous.

Dissimilar conditions to equivalent transactions - When two transactions are treated differently for reasons not relating to the value or nature of the transaction. See Horizontal Agreements and Verticals Agreements.

Dominance - A dominant firm is one which accounts for a significant share of a given market and has a significantly larger market share than its next largest rival (typically considered to have market shares of 40 per cent or more). Dominant firms can raise competition concerns when they have the power to set prices independently to their competitors.

E

Economic Dependence of the Suppliers and Purchasers - Situation where the purchasers do not have other sources of supplying and they depend on the dominant.

Elections by Assembly - Members of an elected assembly select the members of the Competition Authority.

Environmental Agreements - When competing firms agree to the maximum amount of pollution they will release. Agreements like these allow firms to become more environmentally friendly while staying competitive with other firms. See cooperation-exceptions and Horizontal Agreements.

Exceptions/Exemptions for Sectors - For certain industries the law does not apply. Most likely, there are other sectors specific legislations applicable for those sectors.

Exceptions/Exemptions for State Enterprises - The law does not apply to state owned enterprises (when the government decides to provide certain goods or services).

Exceptions/Exemptions for practices (collective bargaining, R&D coop) - Competition legislation may provide exemptions for certain cooperative arrangements between firms which may facilitate efficiency and dynamic change in the marketplace (R&D) or for collective bargaining since they may result in benefits for the consumer by improving products and production.

Exceptions to Vertical Agreements - Vertical agreements that are legal because they provide beneficial results for the market.

Exclusive Dealership - The buyer undertakes to purchase all its requirements for the product from the seller. See Vertical agreements.

Exclusive Territories/Exclusive Distribution - Retailers agree to resell the product only within specified territories. See Vertical Agreements.

Ex Officio - Members of the Competition Authority holding a position in the Authority by virtue of holding another public office.

Export Cartels - Agreements to charge a specified export price and/or to divide export markets. See Horizontal Agreements.

F

Factors Considered in Dominance - Factors considered to determine the dominance are generally market share turnover, barriers to entry, potential competition, economic dependence of the suppliers and purchasers. See Dominance.

Failing Firm Defense - Merger does not lead to a deterioration of the competitive structure of the market because the acquiring firm argues that the acquisition of such a firm does not result in substantial lessening of competition since it is likely to exit the market anyway.

Franchise Fee Contracts - Contracts with fees paid by a franchise to a franchisor for franchise rights. See Vertical Agreements.

Fumus Boni Iuris - Factual and legal grounds for establishing a prima facie case. It is generally one of the conditions for granting an interim measure.

H

Horizontal Agreements - Explicit or implicit arrangement, whether or not legally enforceable, between firms in competition with each other to their mutual benefit and eliminate the competition on the market.  

I

Import Cartels - Agreements to restrict the ability of firms to import goods from foreign markets. See Collusion.

Independence - The authority, which monitors anti-competitive behavior, is independently operated and funded. 

Interim Measures Provisional Powers  - Conservatory measures imposed on firms by the Competition Authority in relation to a competition case, in which a final decision on the substance has not been reached yet, in order to avoid anti-competitive behavior leading to irreversible damage before being sanctioned.

J

Joint Dominance - Two or more independent economic entities have the ability to behave independently of its competitors, customers, suppliers, and the consumer. See Dominance.

Joint Ventures - An association of firms or individuals formed to undertake a specific business project to share risks and pool capital.

L

Law differentiates between horizontal and vertical agreements - The Competition law in the country may or may not differentiate between arrangements that exclude competition between similar firms, and agreements that exclude competition between suppliers and buyers.

Length of Mandate - Once appointed, members of the Competition Authority cannot be removed without strong justification, such as administrative misconduct or criminal charges.

Leniency Program - General term for the total or partial reduction of fines applied to firms that cooperate with antitrust authorities in cartel investigations.

License Agreements - Holder of trademark or intellectual property grants a non-exclusive license to another to create and distribute a product using that trademark or intellectual property.It is a vertical restriction of competition that can be exempted. See Vertical Agreements.

Limit/control market, production, technical development, or investment - Agreements to maximize profits limiting production or technological advances resulting from investment in research and development stifling innovation in the long term. See Horizontal Agreements..

M

Market Share - The percentage of the market for a product that a firm supplies. Measure for the relative size of a firm in an industry or market, in terms of the proportion of total output, sales or capacity it accounts for.  It is used to measure a firm's market power. 

Membership Requirements - If members of the Competition Authority are required to have a certain academic or professional background in order to be appointed.

Merger and Acquisition (M&A) - The combining of two or more entities into one, through a purchase or a pooling of interests. Mergers can be horizontal, vertical or conglomerate.

Merger of Undertakings - The combining of two or more entities into one, through a purchase acquisition.

Monopoly - Monopoly is a situation where there is a single seller in the market.

Notification Requirements in M&A -Formal information which firms provide to the authority.

Number of Members - Number of members of the Board, or commissioners of the authority responsible for monitoring and enforcing the competition rules. 

O

Open Ended Provision - A broad provision which does not specifically enumerate what horizontal or vertical agreements are unacceptable, but merely makes a broad blanket generalization prohibiting them. See Horizontal Agreements and Verticals Agreements.

P

Part of International Network - Treaties regarding competition, voluntary cooperation for a where the Competition authority are part.

Part of Ministry - The authority, responsible for monitoring and enforcing the competition rules, is part of a ministry or department of the central government.

Part of the Congress or Parliament - The authority, responsible for monitoring and enforcing the competition rules, is a legislative body of the central government.

Periculum in Mora - There is danger in delaying the action. For example, as a ground for issuing a warrant for seizing documents, it is needed that a reasonable ground for suspecting that if the warrant is not issued promptly, the documents would be altered, suppressed or disposed.

Potential Competition - Pressure exercised upon incumbent firms by the possibility that new or existing firms will enter a specific market (potential competitor). New entrants may be attracted by above normal profits made in this market by incumbent firms, possibly as a result of weak competition. Additional firms entering the market will increase the overall quantity supplied with the effect that prices fall and above normal profits disappear. Thus, the possibility of market entry has a certain "disciplinary effect" on the behaviour of incumbents. However, the threat of potential competition is relatively small when entry barriers are high. (Glossary of the EU).

Predatory Pricing - An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat. See Abuse of Dominance.

Prevent the Entry or Expulsion from the Market - Agreements to raise the entry barriers in the market: Prevent or hinder companies from entering a specific geographical or product market. See Horizontal Agreements.

Price Fixing - Agreements among competitors to fix prices in order to restrict competition and earn higher profits. See Horizontal Agreements.

Principal Objectives - Public interests that the law is targeting. They might include consumer welfare (individual benefits/satisfaction derived from the consumption of goods and services); economic efficiency (most effective manner of utilizing scare resources); public interest/benefit (the production of goods and services which results in the most desirable long term benefit for the entire population); promotion of competition (promotion of “a situation in a market in which firms or sellers independently strive for the patronage of buyers in order to achieve a particular business objective, e.g., profits, sales and/or market share.”) (Glossary of industrial organization economics and competition law, OECD).

Production Agreements - When two firms share the costs of production. For example sharing a factory, or jointly manufacturing an input that both firms require. See cooperation-exceptions and Horizontal Agreements.

Purchasing Agreements - An agreement between two firms allowing them to pool their purchasing power to buy inputs at a lower price and in greater quantitites. See cooperation-exceptions and Horizontal Agreements.

Q

Quantity Forcing - Quantity forcing is when in order to buy one product a firm needs, it is forced by the supplier to buy a certain quantity of that product or to buy a certain quantity of another product. See Vertical Agreements.

Quarantine after Completion of Term - Member of the Competition Authority who leaves the agency must stay out of the private sector regulated by agency where he or she was working for a given period of time.

Quasi-Judicial Authority - The authority, responsible for monitoring and enforcing the competition rules, operates as a government policy-making body at times but also exercises a licensing, certifying, approval or other adjudication authority which is "judicial" because it directly affects the legal rights of a person.

R

Refuse Access to Essential Facility - A dominant firm, owner of an "essential" or "bottleneck" facility is refusing to provide access to that facility at a "reasonable" price. See Abuse of Dominance.

Refuse to Deal - A dominant firm can undermine competition by a competitor by refusing to deal with them itself. See Abuse of Dominance.

Regional Integration and Network - Various legal form of cooperation among countries.  The countries get together either because of geographical closeness or for economic or political interests.
Generally, “regional integration among developing countries is part of a wider strategy to promote equitable growth and is not an end in itself. Effective regional integration will increase competition, reduce private transaction costs, enable firms to exploit economies of scale, encourage inward foreign investment and facilitate macroeconomic policy coordination. Open regionalism complements unilateral liberalization. A regionally coherent liberalization strategy will reduce and smoothen the cost of adjustment to an economy in the face of globalization, both for the private and public sector.” (europa.eu.int)

Removal of Commissioners - Legitimate reasons, stated by law, for which the commissioners can be removed within the length of their mandate. It can be for death or serious illness, condemnation for criminal offences, resignation etc.

Resale Price Maintenance - A supplier and a buyer agree with respect to the price at which the buyer will resell. See Vertical Agreements.

Research and Developtment -  Joint invesment in research which may lead to innovation which would be too costly or difficult for one firm to undertake alone. See cooperation-exceptions and Horizontal Agreements. 

Restrictions of Sales to End-users by a Wholesaler - When a wholesaler limits to whom the reseller may sell the product. It is a vertical restriction of competition that can be exempted. See Vertical Agreements.

Restrictions of Sales to Unauthorized Distributors - The seller requires that only authorized retailers can sell its goods. It is a vertical restriction of competition that can be exempted for the efficiency they can create in the market. See Vertical Agreements.

Restrictions of Sales of Components by a Buyer - It is a vertical restriction of competition that can be exempted if it produces efficiencies in the market. See Vertical Agreements.

Royalty - A payment made to an author or inventor for each copy of a work or article sold under a copyright or patent. See Vertical Agreements.

S

Separate Body - The authority which is responsible for monitoring and enforcing the competition rules. It is not part of the central government.

Separation Investigation and Adjudication - The Competition Law can create a system where there is a clear separation between the functions of investigation and adjudication because the two functions are performed by two different bodies or separate branches of the same body. Other times, this separation is not foreseen by the Law.

Single Firm Dominance - One economic entity has the ability to behave independently of its competitors, customers, suppliers, and the consumer. See Dominance.

State Aid - Any aid granted by a State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

Substantial Lessening of Competition (SLC)- The SLC test does not set an absolute threshold. Instead it compares the state of the market after the specified merger, with the hypothetical state of the market in the absence of the merger. The test seeks to predict whether, post-merger, the parties can institute a nontransitory price increase above a certain threshold level (say 5 or 10 per cent) which will vary depending on the case without attracting entry of new firms or
production of substitute products. Their ability to maintain or exceed this price
threshold is assessed by detailed examination of quantitative and qualitative
market structure and firm behaviour factors.

T

Thresholds - Turnover thresholds of the merger regulation must be notified.

Turnover - Volume of business over a period of one fiscal year.

Tying or tied selling - Refers to situations where the sale of one good is conditioned on the purchase of another good. See Horizontal Agreements and Verticals Agreements.

Type of Law - The nature of the Competition Law. The law may contain civil/administrative provisions only, and therefore the breach of Competition Law is regarded as a civil or administrative offence; or the law contains also criminal provisions and its breach is regarded as an offense and punished as a crime with fine or punishment.

U

Undertaking, firm, company - Used as synonymous.

Unfair Trade Practices - Provisions relating to misleading advertising and deceptive marketing practices that are designed to provide consumers with basic uniform and accurate information on certain consumer products and to avoid deceptive and false representations.

V

Vertical Agreements - Explicit or implicit arrangement,whether or not legally enforceable, among suppliers and buyers on different production/distribution levels. Are considered part of this category the application of the unfair business conditions unilaterally imposed to the buyer as a condition for the sale.

Voting - System for taking official decisions for the enforcement of the Competition Law. 

Years CL amended - The year the original law on competition was amended.

Years CL amended - The year the original law on competition was amended.