OECD Best Practice Roundtables in Competition Policy, October 2011
86 Pages Posted: 20 Oct 2011 Last revised: 10 Jan 2012
Date Written: January 9, 2012
One of the most controversial theories of harm in competition law in general and within the category of exploitative abuses in particular is excessive prices. While many arguments have been given against excessive price cases, there also exist many arguments in favour of such cases. Furthermore regulation and regulatory interventions with the aim of curbing excessive prices are prevalent not only in those jurisdictions that allow for excessive price cases in antitrust but also in those where competition law does not foresee excessive prices as an antitrust offense.
The reasons against excessive prices cases include inter alia the risk of undermining investment incentives both, of firms already in the market and potential entrants, the legal uncertainty that may be associated with the concept and also the risk of competition authorities overstepping their legitimacy in light of political pressures. Reasons in favour of excessive prices as an antitrust offence include inter alia limited potential for market self-correction due to permanently high entry barriers, the absence of a regulator or regulatory failure. One of the most prominent reasons in favour of excessive price cases in light of the consumer orientation of most competition laws is that excessive prices exert the most direct negative impact on consumers.
Keywords: Excessive Prices, Excessive Pricing, Antitrust, Competition Policy, Abuse of Dominance, Price Gouging
JEL Classification: L41, K21, K23, L51
Suggested Citation: Suggested Citation