Most Read Contributor in Hong Kong, September 2016
Originally published 3rd December, 2014
previous episodeof this series, Mayer Brown JSM discussed
how a non-solicitation agreement between competitors differs from
the typical restrictive covenants in an employment contract. Colin,
now feeling quite learned, is ready to learn more...
Colin: You mentioned that "group
boycotts" could pose problems too? So, what are "group
Mayer Brown JSM: There are various forms of
"group boycotts". A boycott may be aimed at preventing a
new potential competitor from entering the market. It may also take
the form of eliminating an existing competitor.
In an employment context, group boycotts may take the form of a
group of competitors ganging up to poach a competitor or a
potential competitor's key employees in order to cripple that
competitor's ability to compete. Such conduct may violate
Colin: I heard people talking about "cartel
agreement" when they discussed competition law issues. What is
a "cartel agreement"?
Mayer Brown JSM: A "cartel agreement"
is basically an agreement between competitors which has the
objective of reducing or eliminating competition among cartel
members. For example, if a boycott is intended to facilitate a
cartel agreement to eliminate a competitor, the boycott will be
considered an essential part of the cartel. A "cartel
agreement" will be a clear and serious violation of the
Colin: So this only applies where the competitors gang
up and target an outside member?
Mayer Brown JSM: No. It would also be
anti-competitive if a group takes action against one of its own
members. It is not uncommon for cartels to take action against a
"rogue" member as "punishment" for adopting a
different course of conduct than what has been agreed amongst the
cartel members, which then undermines the cartel arrangement.
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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