Small business education program

Parallel behaviour

A concerted practice should be distinguished from parallel behaviour arising as a result of two businesses independently responding to market conditions. Parallel behaviour by competitors in a market is not by itself evidence that those competitors are involved in a concerted practice. In a highly competitive market, competitors may independently respond almost immediately to each other’s changes in pricing.

For example, if one competitor lowers its price, others may respond immediately to avoid losing customers.

Example: A number of petrol retailers notified each other of their future pricing intentions and started to make business decisions in expectation of calls from their competitors. The retailers go to considerable lengths to ensure that their conversations occur in secret and began to refer to each other by code names. No attempt was made to reject the calls.

While they did not commit to do so, and although there were some occasions when the prices are not followed, the petrol retailers regularly followed the price changes foreshadowed by each other. Even though the conduct did not reach the level of an understanding (Cartel conduct), it is likely that the retailers are engaging in a concerted practice.

For more information, visit Anti-competitive conduct and Guidelines on concerted practices.