{"id":10024,"date":"2022-07-03T17:34:37","date_gmt":"2022-07-03T17:34:37","guid":{"rendered":"http:\/\/legalblog.ie\/pricing\/"},"modified":"2022-11-18T22:54:53","modified_gmt":"2022-11-18T22:54:53","slug":"pricing","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/pricing\/","title":{"rendered":"Pricing"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/pricing\/#Price_Fixing_Agreements\" title=\"Price Fixing Agreements\">Price Fixing Agreements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/pricing\/#Scope\" title=\"Scope\">Scope<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/pricing\/#Price_Fixing_Arrangements\" title=\"Price Fixing Arrangements\">Price Fixing Arrangements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/pricing\/#Price_Discrimination\" title=\"Price Discrimination\">Price Discrimination<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/pricing\/#Predatory_Pricing\" title=\"Predatory Pricing\">Predatory Pricing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/pricing\/#Resale_Price_Maintenance\" title=\"Resale Price Maintenance\">Resale Price Maintenance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/pricing\/#Other_Pricing_Issues\" title=\"Other Pricing Issues\">Other Pricing Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/pricing\/#Trading_Conditions\" title=\"Trading Conditions\">Trading Conditions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/pricing\/#Unfair_Trading_Conditions\" title=\"Unfair Trading Conditions\">Unfair Trading Conditions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/pricing\/#Generally_Permitted\" title=\"Generally Permitted\">Generally Permitted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/pricing\/#Market_Segmentation\" title=\"Market Segmentation\">Market Segmentation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/pricing\/#Advertising_Restrictions\" title=\"Advertising Restrictions\">Advertising Restrictions<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Price_Fixing_Agreements\"><\/span>Price Fixing Agreements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Arrangements and agreements, which have as their object, the fixing and setting of prices, either directly or indirectly, are prohibited by competition law. They are rarely, if ever, capable of being justified.<\/p>\n<p>Generally, price-fixing constitutes a serious breach of competition law. It is contrary to the very basic principle that prices should be set by competition. However, the application of uniform prices by competitors does not necessarily constitute price-fixing.<\/p>\n<p>It is sometimes argued that price-fixing might be beneficial if it is at a reasonable level or below cost.\u00a0 It is argued that price fixing may assist research and development, provide stability to the market and eliminate cyclical effects. However, price-fixing arrangements have been licensed, only exceptionally by competition authorities, in very particular circumstances and in particular sectors only.<\/p>\n<p>It is rare to encounter explicit agreements on price-fixing between competitors since the Competition Act was first enacted. It is more likely to arise indirectly.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Scope\"><\/span>Scope<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The form in which the price fixing takes place is irrelevant. There need not be an explicit agreement or any agreement at all The regular exchange of price information may breach may constitute price fixing in itself.<\/p>\n<p>Price-fixing may arise in the rules of a professional or trade body.\u00a0 Price-fixing may be horizontal and may be undertaken between the participants in the same industry and potential competitors. It may also occur vertically when a distributor, manufacturer or wholesaler, instigates price fixing at lower levels, typically at the consumer level.<\/p>\n<p>Price-fixing applies to both the sale and purchase price.\u00a0 Although not as readily apparent, dominant purchasers may equally interfere with the free operation of the market. Price fixing may involve the setting of maximum and minimum prices.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Price_Fixing_Arrangements\"><\/span>Price Fixing Arrangements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Concerted practices and arrangements may constitute price-fixing.\u00a0 Arrangements to maintain a differential between two markets or to agree on the timing of price changes are likely to breach the Competition Act.<\/p>\n<p>If prices move in tandem, it may constitute evidence of price fixing.\u00a0 Even if they do not move simultaneously, there might be price-fixing if the movement is orchestrated.<\/p>\n<p>Arrangements affecting terms and conditions, target prices, fixing rebates and discounts, imposing standard terms, and linking prices to price indices are likely to breach the prohibition.\u00a0 Even agreements not to sell at a loss or sell below cost are likely to be invalid.<\/p>\n<p>Arrangements between businesses or undertakings with or through trade bodies, which set types and levels of discount, are likely to breach competition law. This may prohibit discounts, where they indirectly fix prices.<\/p>\n<p>The setting of margins by agreements or arrangements between undertakings and\/or trade associations is likely to breach competition law. Credit terms and the criteria for grant of credit and payment terms may breach the prohibition.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Price_Discrimination\"><\/span>Price Discrimination<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Price discrimination occurs when sellers discriminate between purchasers in relation to the sale of the same or similar goods and services in similar circumstances.\u00a0 Price differences may be justified and are normal, but they should be related to the difference in the underlying costs.\u00a0 It may constitute price discrimination to sell different goods at the same prices, or the same goods at different prices to different purchasers.<\/p>\n<p>Discriminatory pricing will often be desirable and necessary.\u00a0 Businesses may need to sell at different prices in order to clear stock or during off-peak periods. If the discrimination involves applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, the arrangement is prohibited.\u00a0 Similarly, discriminatory pricing may constitute an abuse of the dominant position on the part of a dominant market participant.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Predatory_Pricing\"><\/span>Predatory Pricing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Pricing may be predatory if it is at a level such as to prevent competitors from entering the market.\u00a0 There may be below-cost selling.<\/p>\n<p>It is capable in principle, of constituting an anti-competitive practice or an abuse of a dominant position.\u00a0 Rebates may potentially constitute anticompetitive arrangements or an abuse of dominance. They may incentivise a purchaser not to deal with a competitor.<\/p>\n<p>Predatory pricing usually involves a business selling below cost in order to force a competitor out of the market or to lose market share. It typically involves trading below cost for a period.\u00a0 The aim is generally to increase prices after the competitors have been eliminated or weakened.\u00a0 Predatory purchase prices may equally be prohibited.<\/p>\n<p>Predatory pricing by a non-dominant business is not a breach of the Competition Act in itself.\u00a0 However, if it is undertaken by a dominant undertaking or pursuant to an arrangement between undertakings, it may constitute a breach.<\/p>\n<p>Predatory pricing may take many forms.\u00a0 It may involve cutting a competitor out of supplies by overpaying a supplier. It typically occurs where the barriers to entry onto the market are high.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Resale_Price_Maintenance\"><\/span>Resale Price Maintenance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Retail Price maintenance agreements involve businesses agreeing with each other to resell only at a particular price or on terms specified or agreed upon.\u00a0 It may involve an agreement between a single entity and a supplier. It may be the subject of an arrangement collectively or set out in trade rules.<\/p>\n<p>Resale price maintenance was formerly very common in the UK and Ireland.\u00a0 It applied, in particular, in the pharmaceutical industry, consumer goods and in particular in relation to books and periodicals.<\/p>\n<p>Retail Price maintenance is not inherently unlawful in itself.\u00a0 It was permissible at common law.\u00a0 A recommendation of resale price maintenance does not, itself, constitute a breach of competition law. However, there may be an infringement if there is an implied agreement, arrangement or concerted practice under which a seller, in fact, adheres to recommendations.<\/p>\n<p>Recommended prices of themselves are not necessarily a breach.\u00a0 They may, and frequently will, constitute a breach of the prohibition on anticompetitive behaviour. The imposition of retail price maintenance may of itself, be an abuse of the dominant position, where it is imposed by virtue of the dominant position.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Pricing_Issues\"><\/span>Other Pricing Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Parallel pricing involves two businesses changing their price in the same manner and at the same time.\u00a0 Parallel pricing is not prohibited unless there is an agreement or arrangement between the parties in breach of competition law or there is an abuse of a dominant position.<\/p>\n<p>Excessive pricing in this context refers to charging greater than what is a reasonable return in terms of the underlying cost structure.\u00a0 It is not prohibited in itself unless it breaches one of the general prohibitions.\u00a0 Excessive pricing may be indicative of the existence of a cartel or of the abuse of a dominant position.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trading_Conditions\"><\/span>Trading Conditions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Non-price terms and conditions of trading may constitute anticompetitive practices or be an abuse of a dominant position.\u00a0 The trading conditions may embrace periods of credit, the interest charged, differing levels of service, guarantees, warranties and the whole range of trading terms and conditions.<\/p>\n<p>Standard terms and conditions may constitute anti-competitive practice. Examples of anti-competitive arrangements include directly or indirectly fixing trading or price conditions, applying dissimilar conditions to equivalent transactions with other trading bodies, thereby placing them at a competitive disadvantage, \u00a0making the conclusion of contract subject to acceptance by the other party of supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of such contracts.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Unfair_Trading_Conditions\"><\/span>Unfair Trading Conditions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Instances of abuse of dominant position include directly or indirectly imposing unfair purchase and selling prices or other unfair trading conditions It includes applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage or making the conclusion of the contract subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.<\/p>\n<p>Restrictions on the use of goods or the imposition of conditions under which they may be dealt with will generally breach competition law.\u00a0 This may include requirements and prohibitions on resale, restrictions on the quantum permitted for resale and restrictions on the category of the end use of the goods.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Generally_Permitted\"><\/span>Generally Permitted<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>EU Commission guidance sets out on certain restrictions which will not generally breach competition law restrictions in themselves. They include<\/p>\n<ul>\n<li>issuing of standard printed terms and conditions by trade associations;<\/li>\n<li>restrictions on duty-free retailers from selling as part of duty-paid transactions.<\/li>\n<li>restrictions on wholesalers selling to end-users (the wholesale and retail levels form different functions);.<\/li>\n<li>restrictions on large-scale institutional or other large customers, reselling goods supplied for their particular purposes to others.<\/li>\n<\/ul>\n<p>Agreements and arrangements between undertakings and conditions imposed by dominant undertakings in relation to key terms and conditions may be unlawful. This may include common guarantee schemes and joint after-sales service.<\/p>\n<p>Discrimination in terms and conditions may be anti-competitive in accordance with the general principles.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Market_Segmentation\"><\/span>Market Segmentation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>At EU level, agreements which tend to segment the single market are subject to particular scrutiny.\u00a0 This will include territorial restrictions, bans on imports and exports and price discrimination in imports and exports, \u00a0\u00a0In each case, they are capable of constituting anti-competitive arrangements or abuse of a dominant position.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Advertising_Restrictions\"><\/span>Advertising Restrictions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Restrictions on advertising are likely to be invalid. Advertising is a key element in the operation of markets. \u00a0An agreement not to advertise in itself is likely to breach the prohibition. Arrangements for advertising jointly may potentially be anti-competitive.\u00a0 However, they may be permissible where their purpose is to bring the public\\&#8217;s attention to goods of a particular industry.<\/p>\n<p>Businesses must not be prevented from advertising individually.\u00a0 The promotion of joint quality labels and marks may be permissible.\u00a0 It should be available to anybody in the industry who wishes to have access to it, subject to meeting objectively justifiable standards.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10024\" data-postid=\"10024\" class=\"themify_builder_content themify_builder_content-10024 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Price Fixing Agreements Arrangements and agreements, which have as their object, the fixing and setting of prices, either directly or indirectly, are prohibited by competition law. They are rarely, if ever, capable of being justified. Generally, price-fixing constitutes a serious breach of competition law. It is contrary to the very basic principle that prices should [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[158],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10024"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10024"}],"version-history":[{"count":5,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10024\/revisions"}],"predecessor-version":[{"id":20506,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10024\/revisions\/20506"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}