Friday, August 15, 2008
Excessive Prices, Unfair Prices and Economic Value: The Law of Excesive Pricing Under Article 82 Ec and the Chapter II Prohibition
Posted by D. Daniel Sokol
Mark M. Furse (University of Glascow School of Law) has provided some thoughts on Excessive Prices, Unfair Prices and Economic Value: The Law of Excesive Pricing Under Article 82 Ec and the Chapter II Prohibition.
ABSTRACT: It is a fundamental tenet of competition law in the European Community (EC) and the UK that monopoly itself is not condemned. In the EC and the UK (and the other member states that have adopted arts 81 and 82 EC as the model for domestic competition law) it is the "abuse" committed by the undertaking in a dominant position that falls to be condemned. However, both Article 82 EC and section 18 of the Competition Act 1998 (CA98) make reference, in the list of potentially abusive conduct, to "directly or indirectly imposing unfair purchase or selling prices". In a number of cases this rubric has been extended to cover situations in which dominant undertakings have been attacked for charging "excessive prices". As has been long recognised, there are significant problems in applying this rubric, particularly given the terminology employed both in Article 82 EC and in the early case law. Neither the EC Commission nor the European Court of Justice, or the relevant UK authorities, has provided a robust working method of determining when a price is to be held to be excessive. Recent cases which appear on their face to provide a clearer methodology, and which have recognised the necessary separation of the core ingredients of making a finding of abuse in respect of an excessive price, have further complicated matters by accepting that, in part at least, whether a price is fair or unfair may depend on the demand for the product. The logical problems such an approach raises are dealt with in this paper.