Pricing—competition law considerations

The following Competition practice note provides comprehensive and up to date legal information covering:

  • Pricing—competition law considerations
  • Types of pricing conduct
  • Agreements and concerted practices
  • Dominant firm conduct
  • Examples of pricing conduct
  • Fidelity inducing rebates
  • Predatory pricing
  • Margin squeeze
  • Excessive pricing
  • Discriminatory pricing
  • More...

Pricing—competition law considerations

Types of pricing conduct

Broadly speaking, EU and UK competition law focuses on two categories of pricing conduct:

  1. agreements and/or concerted practices focused on price, and

  2. pricing policies implemented by 'dominant' undertakings.

Agreements and concerted practices

  1. between two or more undertakings relating to the level at which price is set or otherwise coordinated (directly or indirectly through contractual mechanisms, undocumented conduct and/or information exchanges)

  2. such 'price restrictions' (as per vertical distribution/resale agreements, price parity arrangements, horizontal cooperative arrangements and cartel or cartel-like activity) are mainly an Article 101(1) TFEU concern (see The prohibition on restrictive agreements)

  3. coordination on price (whether in a horizontal or vertical context) is generally considered illegitimate—it being one of the most troublesome kinds of restrictions insofar as it goes against the very essence of competition (ie freedom to price competitively/independently)

  4. however, certain pricing agreements may be benign or even pro-competitive on the basis that they:

    1. potentially fall outside the Article 101(1) TFEU prohibition altogether on 'de minimis' grounds or on account of 'agency', 'ancillary restraint ' or other relevant considerations—eg where it is an intra-group arrangement

    2. fall within the safe harbour of a relevant block exemption

    3. do not produce appreciable restrictive effects within the meaning of Article 101(1) TFEU (see Effects analysis under Article 101(1) TFEU), or

    1. even where shown to be restrictive, nevertheless are justified on exemption grounds under

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