Exploitative Prices in European Competition Law
Abusive practices in competition law, Edited by Fabiana Di Porto and Rupprecht Podszun. Ascola series, Edward Elgar, 2018
18 Pages Posted: 16 Sep 2015 Last revised: 23 Jan 2019
Date Written: September 15, 2015
Undertakings may restrict competition by cooperating with their competitors or by interfering with their ability to compete. In both cases, their ultimate goal is to raise the price they charge for their products or services. Therefore, the main concern about both collusive and exclusionary practices is that they enable firms to profitably raise prices over their marginal costs; in short: they create market power.
In European competition law it has been considered that “unfair prices”, as it is used in Article 102 (a) TFEU, should not only include exclusionary high prices, but also prices which, without reinforcing it, represent a mere exercise of the market power legitimately acquired by the dominant firm.
This chapter analyzes the case-law of the European Court of Justice on these “exploitative prices” and suggests that, given the legal uncertainty of the prohibition, its economic and institutional flaws and the conceptual contradictions that it entails, regulating the prices of monopolists should be done ex ante and left to government or sector-specific regulators. The prohibition of “unfair prices” should be interpreted by competition authorities as referring merely to exclusionary prices.
Keywords: EU competition law, Treaty of Rome, competition rules, abuse of a dominant position, exploitative practices, exclusionary practices, monopoly price, exploitative prices
JEL Classification: B15, B25, D42, D63, K21, K42, L12, L41, L43, L51
Suggested Citation: Suggested Citation