Competition law hub and spoke

  • What are hub and spoke competitors?

    Hub and spoke cartels are distinct from other cartels because of the lack of direct communication between the horizontal competitors (spokes).
    Such cartels use a third party (the hub) to share information and manipulate the competition..

  • What is a hub and spoke according to competition law?

    Hub-and-spoke arrangements are horizontal restrictions on the supplier or retailer level (the “spokes”), which are implemented through vertically related players that serve as a common “hub” (e.g., a common manufacturer, retailer or service provider)..

  • What is an example of a hub and spoke model?

    Using a classic hub and spoke system, the passenger boards a plane in New York, which flies to the London airport and then lands at Heathrow Airport in London.
    The London airport, in this example, is the hub.
    The spokes would be the routes the plane takes to get to London from New York..

  • What is hub and spoke arrangement in competition law?

    Hub and spoke cartels are distinct from other cartels because of the lack of direct communication between the horizontal competitors (spokes).
    Such cartels use a third party (the hub) to share information and manipulate the competition..

  • What is hub and spoke model of cartels?

    A hub and spoke cartel can be defined as the indirect exchange of information between two independent undertakings which are horizontal competitors on the supplier or retailer level (“spokes”), through another undertaking operating at a different level of the production or distribution chain (“hub”)..

  • What is hub and spoke system in economics?

    Normally, an organization ("hub") establishes and maintains the network in the field where it functions offering the infrastructure for services (financial, industrial, logistic, medical, educational, transportation etc.) to the subsidiary structures ("spokes"), at local, regional, national and global level, performing .

  • What is the hub and spoke model?

    The hub and spoke model is a distribution network that unsurprisingly resembles a bicycle wheel.
    The hub sits in the middle and allows each of the spokes to move in one direction of delivery and meet at a central location..

  • Normally, an organization ("hub") establishes and maintains the network in the field where it functions offering the infrastructure for services (financial, industrial, logistic, medical, educational, transportation etc.) to the subsidiary structures ("spokes"), at local, regional, national and global level, performing
  • To establish a hub-and-spoke cartel, evidence of anti-competitive behaviour i.e. an explicit collusive element, is required.
    To establish the hub's liability, the plaintiffs must show evidence of a horizontal agreement between spokes, participation by the vertical player i.e. hub, and active facilitation of the scheme.
The “hub” facilitates the co-ordination of competition between the “spokes” without direct contacts between the spokes. In the extreme, the effects of a horizontal hard-core cartel can be achieved purely based on indirect communication between the horizontally aligned members of a hub and spoke arrangement.
Hub-and-spoke arrangements are horizontal restrictions on the supplier or retailer level (the “spokes”), which are implemented through vertically related players that serve as a common “hub” (e.g., a common manufacturer, retailer or service provider).
Hub-and-spoke arrangements are horizontal restrictions on the supplier or retailer level (the “spokes”), which are implemented through vertically related 
The business community faces the challenge of complying with legal standards which may be still unclearly defined, and awaiting clarification by the courts, 

Are hub and spoke agreements unlawful?

The Supreme Court recently denied a petition to hear a hub and spoke case and has left untouched a decision in which the lower court found that vertical agreements between the hub and each spoke were considered per se unlawful because they facilitated a horizontal conspiracy amongst the spokes.

What are hub-and-spoke arrangements in EU competition law?

In EU competition law, hub-and-spoke arrangements are mentioned in the section of the Horizontal Guidelines related to information exchange.1 Paragraph 55 of the Horizontal Guidelines states that “[i]nformation exchange can take various forms.
Firstly, data can be directly shared between competitors.

What factors should be considered in a hub-and-spoke arrangement?

As regards hub-and-spoke arrangements, particular factors to take into account include:

  • the role of the hub and the spokes (i.e., who is the driver of the conduct) and whether collusion is the only plausible explanation for the conduct. 13.

    • Who is liable for anticompetitive conduct in a hub-and-spoke arrangement?

    34.
    As described above, the spokes of a hub-and-spoke arrangement are liable for the infringement if they are aware of the anticompetitive conduct or could reasonably have foreseen it, whereas the hub can be held accountable as cartel facilitator.

    Doctrine of US antitrust and criminal law


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