Anticompetitive

Anticompetitive describes conduct or practices by firms that reduce, restrain, or distort competition in a market, potentially harming consumers and other businesses. It covers arrangements among competitors and unilateral actions by a firm with market power that lessen competitive pressure, raise barriers to entry, or otherwise frustrate the functioning of competitive markets.

Common forms include cartels or collusive agreements such as price fixing, market division, or bid rigging; abuse of dominance through predatory pricing, tying, exclusive dealing, or refusal to deal; and mergers or acquisitions that substantially lessen competition. Some arrangements that appear pro-competitive can still be anticompetitive if they harm competition, while others may be permissible if they deliver net efficiency gains.

Legal frameworks typically distinguish per se illegality from a rule-of-reason analysis. In the United States, antitrust law prohibits restraints of trade under the Sherman Act Section 1 (with price fixing, market division, and bid rigging generally treated as per se unlawful) and prohibits monopolization under Section 2; the Clayton Act Section 7 addresses mergers likely to lessen competition. In the European Union, Article 101 TFEU bans agreements that restrict competition, and Article 102 TFEU prohibits abuses of a dominant position. Enforcement is carried out by national competition authorities and, for larger cases, by the European Commission; penalties can include fines, injunctions, and structural or behavioral remedies such as divestitures.

Anticompetitive concerns aim to protect consumer welfare, promote efficient production, and encourage innovation. While legitimate competitive strategies exist, sustained anticompetitive conduct can lead to higher prices, reduced choices, lower quality, and impeded entry for new firms.