The concept of exchange of information between undertakings, especially between direct competitors, primarily suggests exchange of sensitive information. Sensitive information is that concerning prices, quantities, market shares, future strategies etc.
Two situations must be differentiated here. The first is the so-called “public exchange of information” between competitors. That kind of exchange can have positive effects on competition, since the information can be used by all other subjects acting in that market, including consumers, which increases market transparency. The second is the so-called “private exchange of information”, where the exchanged information is made available exclusively to competitors. This one has limiting effects on competition, since it increases the transparency only on the supply side.
In that context exchange of information between competitors can come in two main forms. The first is exchange of information that has characteristics of a prohibited agreement in the form of a cartel. The second one is exchange of information that indicates the existence of concerted action between undertakings. More specifically, this kind of exchange minimizes or entirely removes any insecurity on future conduct of a competitor, which eliminates the need for competition.
In other words, undertakings are replacing their competitive behaviour with cooperation, which is contrary to the interests of their suppliers and buyers, as well as the interests of consumers, strictly speaking.
However, it is not always simple to determine if the exchange of information in an actual case constitutes a breach of competition laws (Art. 8 of the Croatian Competition Act and Art. 101 of the Treaty on the Functioning of the European Union).
In other words, when analysing a particular system of information exchange, competition bodies need to take a lot of elements into account. Those are, first of all, the characteristics of that particular exchange system (purpose of exchange, conditions of accessing information etc.) and the nature of information being exchanged (public or private, aggregated or individual, historical or current etc.) Besides that, the exact economic conditions and market characteristic also need to be taken into account (market structure – number of competitors and their shares, market concentration, complexity, stability etc.).
Complexity of determining and proving an exchange of information between competitors has been recognized by the European Commission. In its Directive on horizontal agreements from 2011, it has codified the existing case-law of the Commission and the Court of the European Union, and for the first time, dedicated a whole chapter to exchange of information in practice. One must bear in mind that the Croatian Competition Agency also applies these Directives as part of the European Union’s acquis communautaire.
