Pricing abuses can be viewed as a hybrid between regulation and competition law enforcement, since they raise questions of principle over when pricing that takes advantage of market power should be prevented by competition law action, by regulation or simply left unchallenged. In many cases – e.g. in predation, margin squeeze, rebates and excessive pricing cases – companies may have practical difficulties in assessing ex ante whether their pricing policies are illegally low (in the case of predation and rebates), illegally high (in excessive pricing cases) or some combination of both (in margin squeeze). This has the potential to influence those companies’ incentives significantly, an effect compounded by lack of predictability as to when such cases will be brought.

Monopoloy Table

As such, it is important to have a clear view of what types of cases have been brought recently. This is the object of this paper, available here, which reviews recent instances of price abuses in Europe.

Section 2 looks at pricing abuses at the EU level.

Predation, margin squeeze, rebates and excessive pricing cases have all been brought at the EU level recently. While predation cases may be relatively rare at the EU level, a particularly significant case is currently under review by the European Commission: an investigation into Qualcomm’s sale of chipsets at allegedly below cost prices. The appropriate method to assess costs when R&D is a substantial element of costs may prove particularly difficult in cases such as this one.

Margin squeeze cases have been thin on the ground since the judicial appeal from the Telefonica decision was dismissed in 2014. The sole developments of note are that it has become clear that margin squeeze can be subject to private enforcement (as per the EFTA Court’s judgment in Fjarkkipti / Siminn), and the adoption of the Slovak Telecom infringement decision which applied an as-efficient-competitor test, upheld by the General Court in 2018.

Rebates and excessive prices have been areas of more activity in recent years. As concerns rebates, the most important development is the CJEU’s decision in Intel that loyalty rebates cannot be illegal per se where a ‘no exclusion’ defence is raised. This reversed the General Court’s view that rebates could be illegal per se if they are conditioned on exclusivity or near-exclusivity. According to the CJEU, a merits analysis is required where a no exclusion defence is raised. Such analysis involves an assessment of market power, market coverage, how the scheme worked and of the potential for exclusion of an as-effective-competitor – at least when the Commission or the parties’ raise related objections. Concerning excessive prices, the AKKA/LAA case – related to fees by the collection management organization for musical rights in Latvia – developed the legal criteria for identifying unlawful prices first advanced in Hoffman LaRoche. The ruling suggests that, in order to conclude that a price is excessive, comparisons are needed with other situations based on objective, appropriate and verifiable criteria, and that prices need to be both significantly and persistently higher than the relevant benchmarks for an excessive price to be found.

The author then identifies areas for reform. Concerning margin squeeze, he focuses on the fact that fine amounts do not seem to mirror the potential size either of profits or harms flowing from the prohibited practice – such fine amounts should be increased in order to be deterrent. Regarding rebates, much remains to be clarified in the future. In particular, there is little information so far on how efficiency defences for the existence of non-linear pricing will be treated by courts – which is a problem, since non-linear pricing is quite common. Lastly, even if the criteria that govern excessive pricing were clarified in AKKA/LAA, they remain insufficient to provide sufficient guidance to companies – with particular challenges arising from the identification of ‘unfair’ prices.

Section 3 looks at pricing abuses at the national level.

The analysis follows the same structure as the previous section. A first observation is that predation cases are more frequent at the national level than at the European level. Such cases were pursued in the Netherlands (concerning a tender for public transport), the Baltics (concerning airport fees) and France (concerning gas supply).  The same can be said of margin squeeze cases, which have proliferated at the national level recently. Emblematic cases include the charging to rivals of higher prices for broadband by Telenor (Norway) and for upstream SMS termination by Vodafone and Telecom Italia (Italy); and discounting practices by Correos (Spain – but quashed on appeal), Poste Italiane (Italy – currently under appeal), and Teliasonera in Sweden.

One can observe some interesting developments concerning rebates. In Italy, the courts decided the appeal in the Unilever case a month after the CJEU’s Intel decision – and held that the Intel rule of reason applied to rebates but not to exclusivity clauses.

Lastly, there also has been a fair amount of activity around excessive pricing – even if most cases are archived early in the process. A number of pharmaceutical cases regarding price increases of generics – the Pfizer case in the UK, the Aspen case in Italy and the Danish CD case in Denmark– have stolen the limelight, but it is important to note that pharmaceutical cases are not the exclusive focus of excessive pricing at a national level. For example, the French competition authority fined an undertaking for excessive pricing in the market of waste disposal for hospitals and clinics in Corsica (note: I believe this decision was quashed a couple of weeks ago), while the competition authority in Cyprus sent a statement of objection to a local authority for excessive prices in the supply of water for household use for resorts.

Section 4 concludes.

European courts and competition authorities have increasingly adopted economic tests in price abuse cases. Case experience shows that the as-effective-competitor benchmark has been increasingly accepted and adopted by the European courts when dealing with instances of predation, margin squeeze and rebates. This is to be lauded, since it allows companies to predict whether their planned pricing behaviour would transgress the law on the basis of internally available information. While the as-effective-competitor benchmark is not necessarily an accurate representation of potential costs of competitors, nor are its results always simple to calculate, the improved predictability from having a standard based on internal cost information is beneficial for encouraging compliance with the law, as well as ensuring the fair treatment of companies.

However, many questions remain in the law of pricing abuses, and a consequent ambiguity remains over what actions are illegal and how courts and competition authorities treat a number of pricing practices. A general concern with such cases is that they may intervene more than is appropriate with market processes, signalling a move towards state-run pricing regulation. The impact of this on company incentives and pricing policies is non-trivial. Decision makers may wish to consider this risk when evaluating cases that evaluate corporate behaviour based on ex post standards.


This article does exactly what it says on the tin – it identifies and reviews recent instances of pricing abuses in Europe. On that front, it cannot be faulted, and I recommend it as a first port of call for anyone wanting to look into the topic, even if the analysis of cases is not particularly deep – as one would expect. It seems that national authorities are a lot more active than the European Commission regarding many of these practices, picking up early European cases and running with them.

While I agree that economics-based analysis is becoming more common, I am not sure that the as-efficient-competitor test is as widely relied on as the author thinks – or as the reasoning of some decisions might lead one to believe. Against what one may take from this piece, my intuition –as reflected in last week’s reviews – is that such a test is increasingly perceived as a tool among many, and better suited for some practices than others.

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