4 ms·

Its a slightly grey area. This would be seen as illegal because it is an "agreement" to "limit or control production" which is prohibited by EU law article 101(

Its a slightly grey area. This would be seen as illegal because it is an "agreement" to "limit or control production" which is prohibited by EU law article 101(1). However article 101(3) allows these agreements if it "contributes to improving the production or distribution of goods" and "allow consumers a fair share of the resulting benefit". In a case in Australia [1] LNG producers had to apply to the government in order to coordinate shutdowns. The regulator concluded that they could approve this on the basis that there it was "likely to result in a public benefit" and that "reducing competition in the acquisition of maintenance services is unlikely to be significant" [2] [1] https://www.reuters.com/article/australia-lng-regulator/australian-regulator-authorises-some-lng-producers-to-coordinate-maintenance-idUSL4N1QJ6SM https://www.reuters.com/article/australia-lng-regulator/aust... [2] https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register/western-australian-and-northern-territory-lng-producers https://www.accc.gov.au/public-registers/authorisations-and-...

AnimalMuppet 8y ago
OK, but it's an agreement to make sure that production never gets too limited. That may be to "control production", but it sure isn't to "limit" it.
- barbegal 8y ago
  You could also see it as limiting (and controlling) the production of plant maintenance work. For an example of why this is anti-competitive imagine there are 4 producers A, B, C and D. A, B and C agree that they will co-ordinate shutdowns such that they are shut down for four months of the year each. D is not party to this agreement so must shutdown at a time when one of the other producers is shutdown. During this time their are only 2 producers online meaning increased prices and a net benefit to A, B and C whilst the cost of getting maintenance engineers will also increase because they are working simultaneously with either A, B or C which is a net loss to D.
- solarkraft 8y ago
  > However article 101(3) allows these agreements if it "contributes to improving the production or distribution of goods" and "allow consumers a fair share of the resulting benefit". Isn't this clearly the case here?
  - AnimalMuppet 8y ago
    I would say clearly yes.

AnimalMuppet 8y ago

OK, but it's an agreement to make sure that production never gets too limited. That may be to "control production", but it sure isn't to "limit" it.

barbegal 8y ago
You could also see it as limiting (and controlling) the production of plant maintenance work. For an example of why this is anti-competitive imagine there are 4 producers A, B, C and D. A, B and C agree that they will co-ordinate shutdowns such that they are shut down for four months of the year each. D is not party to this agreement so must shutdown at a time when one of the other producers is shutdown. During this time their are only 2 producers online meaning increased prices and a net benefit to A, B and C whilst the cost of getting maintenance engineers will also increase because they are working simultaneously with either A, B or C which is a net loss to D.
solarkraft 8y ago
> However article 101(3) allows these agreements if it "contributes to improving the production or distribution of goods" and "allow consumers a fair share of the resulting benefit". Isn't this clearly the case here?
- AnimalMuppet 8y ago
  I would say clearly yes.