LAW AND ECONOMY : PARALLEL TRADE - NATIONAL REGULATIONS - PRICES IMPACT - CONSUMERS - CARS INDUSTRIE - PHARMACEUTICALS INDUSTRIE - ARTICLES 101 AND 102 TFEU - COMPARATIVE ANALYSIS - EUROPEAN COMMISSION - FRENCH COMPETITION AUTHORITY

Economic analysis of parallel trade: Automobile and pharmaceutical sectors

This set of papers is derived from the training session on the Parallel trade organised by Concurrences Review that has held on the 12th April 2011. In the first contribution, Gautier Duflos, of the economic office of the Competition Authority explains that parallel trade exploits price differences for the same product between two countries. Within the European Union, free movement of persons and goods encourages such trade-offs that reinforces the common market. The bases of these arbitrations are notably trade policies tailored to consumer preferences or national regulations that impact prices. Two industries are illustrative of these situations: cars and pharmaceuticals. For Anne Wachsmann, author of the second’ contribution and lawyer at Linklaters Paris, the motor vehicles and pharmaceutical industries are typical examples of the competition authorities’ practice regarding parallel trade, in particular owing to the differences in regulation existing among the EU Member States. A comparative analysis of the European Commission and the French competition authority ("Adlc")’s practices is conducted for each of these industries, under both articles 101 and 102 TFEU. This analysis reveals a certain severity of both authorities against restrictions to parallel trade, the AdlC being relatively less strict than the Commission. The intervention of the European courts has however, to a certain extent, mitigated the Commission’s severity in this field.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. Introduction Gautier DUFLOS Economic Service of the Competition Authority 1. Parallel trade exploits price differentials that may exist between several countries for the same product. The importer buys products in the country(ies) where prices are relatively low and resells them in the country(ies) where prices are relatively high, thus ensuring a certain profit. Parallel trade is called 'grey market' to illustrate the fact that, unlike the 'black market', the products concerned, like the distribution channels used, are legal. 2. Products imported in parallel from the producer's network are basically identical in the source and target countries. However,

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Anne Wachsmann, Gautier Duflos, Economic analysis of parallel trade: Automobile and pharmaceutical sectors, May 2011, Concurrences N° 2-2011, Art. N° 35744, www.concurrences.com

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