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    Case Study - Marine Hose - 28jul2020

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    Sao Nguyễn Toàn
    The six marine hose companies entered a Memorandum of Understanding where they agreed to: 1) Report customer inquiries to a coordinator who would designate a "champion" company to win that customer's business. 2) Discuss prices to quote to customers so that the "champion's" price would be the lowest, effectively fixing prices. 3) Enter agreements on market share quotas and regularly adjust target shares for each company. This constitutes a hardcore cartel under Vietnamese law as the companies agreed to fix prices and allocate customers and markets between them in violation of competition laws.

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    Case Study - Marine Hose - 28jul2020

    Uploaded by

    Sao Nguyễn Toàn
    69 views2 pages
    The six marine hose companies entered a Memorandum of Understanding where they agreed to: 1) Report customer inquiries to a coordinator who would designate a "champion" company to win that customer's business. 2) Discuss prices to quote to customers so that the "champion's" price would be the lowest, effectively fixing prices. 3) Enter agreements on market share quotas and regularly adjust target shares for each company. This constitutes a hardcore cartel under Vietnamese law as the companies agreed to fix prices and allocate customers and markets between them in violation of competition laws.

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    Case Study_Marine Hose_28Jul2020

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    The six marine hose companies entered a Memorandum of Understanding where they agreed to: 1) Report customer inquiries to a coordinator who would designate a "champion" company to win that customer's business. 2) Discuss prices to quote to customers so that the "champion's" price would be the lowest, effectively fixing prices. 3) Enter agreements on market share quotas and regularly adjust target shares for each company. This constitutes a hardcore cartel under Vietnamese law as the companies agreed to fix prices and allocate customers and markets between them in violation of competition laws.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    69 views2 pages

    Case Study - Marine Hose - 28jul2020

    Uploaded by

    Sao Nguyễn Toàn
    The six marine hose companies entered a Memorandum of Understanding where they agreed to: 1) Report customer inquiries to a coordinator who would designate a "champion" company to win that customer's business. 2) Discuss prices to quote to customers so that the "champion's" price would be the lowest, effectively fixing prices. 3) Enter agreements on market share quotas and regularly adjust target shares for each company. This constitutes a hardcore cartel under Vietnamese law as the companies agreed to fix prices and allocate customers and markets between them in violation of competition laws.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    CASE STUDY

    MARINE HOSES CASE

    1. Background

    Six companies in the marine hose


    industry entered into a
    Memorandum of Understanding.
    Accordingly, the companies agreed
    that any member (the “Club
    Member”) who received an inquiry
    from a customer would then report
    it to a coordinator, who would in
    turn designate the customer to a
    “champion” i.e. the Club Member
    who was supposed to win that
    customer. Projects would be
    designated to the Club Members on the basis of market share, factory loading,
    customer’s preference and history of supply.

    To ensure that a customer was designated to the right “champion”, the Club
    Members discussed on the prices that each of them should quote so that all the
    prices they offered would be above the price quoted by the champion.

    To this end, the Club Members agreed on price lists which served as a reference for
    the prices quoted to customers and were used to steer tenders to the champion
    which effectively fixed the price for that tender. Moreover, the arrangements also
    removed the risk of price competition from other Club Members.

    The Club Members would also enter into an agreement on market share quotas and
    repeatedly reviewed target market shares to be attributed to each of them.

    To ensure that the arrangements between Club Members are executed smoothly, the
    Club Members informed the coordinator(s) of upcoming tenders. In turn the
    coordinator(s) regularly sent the Club Members lists of allocated tenders with market
    share information and price lists.

    Page 1 of 2
    2. Questions

    a. From the Vietnamese competition law perspective, identify the anti-


    competitive conducts in the case above. Are they hardcore or non-hardcore
    cartels? Why?

    b. If you were an executive of one of the Club Members, what would you advise
    your company to do? Why?

    (The remaining of this page is intentionally left blank)

    Page 2 of 2

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