Paris

Pricing policy: limiting the risks?

Law & Economics Workshop organized by Concurrences in partnership with Simmons & Simmons, Microeconomix, AFJE & EFB.

Ancelin Ombline

Trying to map the risks linked to the pricing policy

Tariff policy can be a way of hiding a questionable commercial practice: rather than refusing to sell to a buyer who exports to the EU against my will, I will apply an unattractive tariff policy to him/her

Pricing policy is only one part of a company’s business policy. It can also be a way of hiding a questionable commercial practice (rather than refusing to sell to a buyer who exports to the EU against my will, I will apply an unattractive tariff policy).

Tariff policy can be constrained by sectoral regulation, the existence of insurance mechanisms and, of course, competition law. This applies to both dominant and non-dominant companies. The case law in this area is not always clear, but we can try to map it out.

Several factors can determine the legality of a pricing policy. First of all, it may be caught by antitrust law. It is then necessary to prove the existence of an agreement with the buyer. This can be tacit, even though the ECJ has attempted to constrain the Commission’s extensive view on this issue since the Bayer Adalat judgment. Tariff policy may also be infringed per se, or in the presence of a dominant position. Since the Hoffmann-La Roche judgment, it has become clear, if there was any doubt, that the latter is not prohibited per se, but only in cases of abuse. Since 2009, the Commission has been favouring an approach based on the effects of exclusionary practices by companies in a dominant position. It is possible to point to efficiencies resulting from the practice in question, but the onus is on the undertaking to demonstrate that they are sufficient to offset the identified anti-competitive effects. The Post Danmark judgment of 2012 may be a first step towards unifying the analysis of exclusionary conduct by a dominant undertaking. Even if the absence of a dominant position leaves greater latitude to companies, constraints remain: vertical restraints, prohibition of resale below cost and abusive pricing.

Photos © Léo-Paul Ridet.

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