Exchange of Information and Collusion—Do Consumer Switching Costs Matter?

"Exchange of detailed and timely information between firms is regarded as a collusion-facilitating practice. On several occasions it has been verified to have potential itself to infringe Article 101(1) of the Treaty (ex Article 81 TEC), as it has been argued to restrict competition between the undertakings involved. This potential is assumed to be larger in more concentrated markets, but the negative consequences are not induced by concentration alone, as the marginal impact of exchange of information on the propensity to collude is larger where collusion is a priori more likely. In legal cases, the Commission decisions in the Fatty Acids case

and especially in the COBELPA/VNP case highlight the importance of analysing the content and the nature of information exchange to the assessment of an infringement."