Glossary of competition terms

This Glossary is based on definitions from DG COMP’s Glossary of terms used in EU competition policy (© European Union, 2002) and the OECD’s Glossary of industrial organisation economics and competition law (© OECD, 1993). Each term is enriched with references of national case laws from the e-Competitions Bulletin and Concurrences Review.

Excess prices

Refers to prices set significantly above competitive levels as a result of monopoly or market power. However, in practice, in absence of a conspiracy or price fixing agreement or evidence of market power stemming from high concentration, it is very difficult to establish a threshold beyond which a price may be considered excessive or unreasonable. Because the basic method of organizing production in a market economy is through the price system, price flexibility is critical. Prices fluctuate in order to bring supply and demand into equilibrium. Temporary shortages in supply or increases in demand will cause prices to rise and provide incentives for increased production and entry of new suppliers. Moreover, it should be noted that price and/or profit comparisons between different firms, markets, or countries are fraught with legal and economic problems. Attempts by government to control or force a roll back of prices that are not a result of restrictions on competition are inconsistent with the philosophy underlying competition policy.

© OECD

Glossary