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Not every price agreement is anti-competitive!

With ever-increasing frequency, we hear reports of heavy penalties and unannounced inspections from the Antimonopoly Office of the Slovak Republic (Office).

Entrepreneurs are experiencing a growing sense of uncertainty. Many do not know what content is allowed and what the Office may consider a cartel agreement.

Cartel agreements often regulate final sales prices calculated through direct and indirect pricing. Price agreements are anti-competitive agreements that set a minimum or fixed sales price. But not every price agreement is illegal. Recommended sales prices, for example, are allowed. However, entrepreneurs cannot insist on these prices or require their observance. Setting maximum prices is also not illegal. None the less, caution is required! The Office can assess the setting of a maximum price as a cartel agreement on a fixed price. Here, the individual circumstances of the case are vital.

The ideal solution to prevent a penalty of up to 10% of an entrepreneur’s turnover is a legal review of the legality of the agreement. Entrepreneurs can also ask the Office for a legal opinion as to whether their draft agreement complies with anti-competitive regulations.