Prof. Dr. Jochen Glöckner, LL.M. (USA)
Chair of German and European
Private and Business law
Universität Konstanz
<jochen.gloeckner@uni-konstanz.de>
Sale under Costs
in German Competition law
Den Haag, Sept. 28, 2005
Jochen Glöckner
The Seminal Case: Gas Stations
in Benrath
Den Haag, NMa 2005
Glöckner
The Seminal Case: Gas Stations
in Benrath
•
Facts of the Case
–
In the late 1920s the owner of a gas
station refused to either join the „Fuel
Convention“ or raise his prices to the
level fixed by the convention. Decision
of the convention to undercut his prices
by only one convention member in
Benrath at each time.
Den Haag, NMa 2005
Glöckner
The Seminal Case: Gas Stations
in Benrath
•
The Legal Standard
–
No prohibition of cartels, but mere
formal controls: cartel agreements must
be in writing and notified, Cartel decree
of 1923
•
As a consequence more than 2.500
industrial cartels were registered in 1925
Den Haag, NMa 2005
Glöckner
The Seminal Case: Gas Stations
in Benrath
•
The Legal Standard
–
–
–
No prohibition of cartels, but mere formal controls: cartel
agreements must be in writing and notified, Cartel
decree of 1923
㤠826 Civil Code: Wilful damage contrary to public policy
A person who wilfully causes damage to another in a manner
contrary to public policy is bound to compensate the other for
the damage“
㤠1 Act against Unfair Competition (1909): General Clause
Any person who, in the course of business activity and for
purposes of competition, commits acts contrary to honest
practices may be enjoined from these acts and held liable for
damages.“
Den Haag, NMa 2005
Glöckner
The Seminal Case: Gas Stations
in Benrath
•
The Legal Standard
–
No prohibition of cartels, but mere formal controls: cartel
agreements must be in writing and notified, Cartel
decree of 1923
–
㤠826 Civil Code: Wilful damage contrary to public policy
A person who wilfully causes damage to another in a manner
contrary to public policy is bound to compensate the other for
the damage“
–
㤠1 Act
against Sitten
Unfair Competition
(1909): GeneralWeise“
Clause
…„gegen
die
guten
verstoßenden
…
Any person who, in the course of business activity and for
purposes of competition, commits acts contrary to honest
practices may be enjoined from these acts and held liable for
damages.“
Den Haag, NMa 2005
Glöckner
The Seminal Case: Gas Stations
in Benrath
•
The Solution of the Reichsgericht (1931)
–
Based on §§ 1 AUC, 826 CC
•
•
•
•
•
Distinction between „competition on the merits“ and „exclusionary
competition“ adopted from an expert opinion written by Nipperdey:
Damage to competitors has to be accepted as a consequence of
competition on the merits, unlike the improvement of one‘s position
on the market as a consequence of exclusionary practices
Price competition is generally competition on the merits, yet
becomes exclusionary, if part of a price policy that is limited to only
one local market.
Ratio decidendi is not the bad intent of the act, but the effect on the
market: Court makes clear that even the cheapest price may turn
out to be an illusion for the public, if, after displacing the
competitors, the survivor of the predatory pricing scheme returns to
monopolistic pricing.
Defendants were enjoined to sell their fuels in Benrath under price
of Plaintiff as long as this price remained underneath the price fixed
by the convention
Den Haag, NMa 2005
Glöckner
Consequences for Competition
and Unfair Competition law
•
The purpose of Unfair Competition law
–
Act against Unfair Competition (AUC; 1896)
•
–
protection of competitors (since late 19th century)
Act against Unfair Competition (1909)
•
•
•
protection of „the public“ (?; since 1920s)
protection of consumers (since 1960/70s)
protection of competition:
–
–
always assumed, made very clearly since 1970s by
some scholars
Act against Unfair Competition (2004)
•
protection of competition now laid down in § 1 s. 2
AUC 2004
Den Haag, NMa 2005
Glöckner
Consequences for Competition
and Unfair Competition law
•
The purpose of Competition law
–
since 1958 Act against Restraints of
Competition (ARC)
•
•
protection of competition
somewhat reluctantly of competitors (cf. § 33
ARC)
Den Haag, NMa 2005
Glöckner
Consequences for Competition
and Unfair Competition law
•
Relationship
–
–
in 1950‘s doctrine of separation
later: identity of purposes with regard to
protection of competition, yet
differentiation as for thrust
•
•
freedom: ARC
fairness: AUC
Den Haag, NMa 2005
Glöckner
Consequences for Competition
and Unfair Competition law
•
Relationship
–
–
in 1950‘s doctrine of separation
later: identity of purpose with regard to protection of
competition, yet differentiation as for thrust
various business practices with a monopolistic „touch“
have been dealt with under Unfair Competition law
–
•
•
•
•
•
predatory pricing
boycot
refusal to deal (mostly under § 826 CC)
abuse of purchasing power in specific cases („tapping“):
asking of „entrance fees“, „shelf renting“, demand for
advertising support)
sale under costs
Den Haag, NMa 2005
Glöckner
Consequences for Competition
and Unfair Competition law
•
Relationship
–
–
–
–
–
–
in 1950‘s doctrine of separation
later: identity of purpose with regard to protection of
competition, yet differentiation as for thrust
various business practices with a monopolistic „touch“
have been dealt with under Unfair Competition law
discussion under new AUC: still governed although not
reflected in the special provisions of §§ 4 ff. AUC?
No case law yet, but most scholars think nothing has
changed, because the legislator didn‘t want to change
anything
Yet rising awareness with regard to compatibility with
Competition law
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
•
Sale under Costs as a part of a
predatory pricing scheme
–
covered by § 4 no. 10 AUC
„Unfair in the meaning of § 3 acts, whoever
…
No. 10: directly hinders competitors.“
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
•
Sale under Costs as a part of a predatory pricing
scheme
–
–
–
–
–
covered by § 4 no. 10 AUC
price under costs per unit (evidence!)
intention to displace: evidentiary problems usually lead
to an assessment on objective grounds: sustained sale
under costs without good business reasons;
apt to displace individual competitors (wishful thinking
not sufficient)
(cf. BGH, GRUR 1990, 371 – Preiskampf; GRUR 1990,
685 – Anzeigenpreis I; GRUR 1990, 687 –
Anzeigenpreis II)
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
•
Sale under Costs without predation, i.e.
without intention to displace
–
governed by § 3 AUC (general clause),
because there is not individual hindrance
price under costs per unit (evidence!)
no business justification
–
–
•
–
–
e.g. market entry; sales promotion; out-stocking
outmoded goods
apt to displace competitors (wishful thinking not
sufficient) and
*apt to do away with competition on the
relevant market almost completely (jeopardy to
the mere existence of competition)*
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
–
BGH, GRUR 1990, 685 – Anzeigenpreis
I: Identity of standards of unfairness
under § 3 AUC and abuse under § 20
ARC; market power needs to be
assessed also when judging unfairness
BGHZ 129, 203 (1995) – HitlistenPlatten: Different standards of
unfairness and abuse, yet tests seem to
be identical
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
BGH, GRUR 1990, 371 – Preiskampf:
•
•
•
Price war between two large electronics discount
stores in the field of LP records (1984), in the course
of which prices fell from a typical 9,95 DM to 4,80 DM
The fact finding court had assessed that smaller
record stores were unable to cope with these prices
and would be driven out of the market
The Bundesgerichtshof was bound by this
assessment of facts and applied the test described
supra, thus holding the price war anti-competitive
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
BGH, GRUR 1990, 685 – Anzeigenpreis I:
•
•
•
Market access of an editor with a new newspaper
giving away advertising space in this newspaper
when combined with (paid) ad space in a pre-existent
newspaper
The Bundesgerichtshof upheld its judicature with
regard to the jeopardizing of competition on the whole
market,
but remanded for further fact finding, pointing out that
a mixed calculation is a perfectly legal conduct.
Therefore it was necessary to take into consideration
the price of the full package
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
BGH, WRP 1991, 484 – MotorbootFachzeitschrift:
•
•
•
•
one editor of a (monthly) yachting magazine
gives away advertising space for private
classifieds
The Bundesgerichtshof upheld its judicature
with regard to the jeopardizing of
competition on the whole market,
and found such jeopardy, because it was a
closed market of few magazines
„network effects“
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
BGHZ 129, 203 – Hitlisten-Platten
(1995):
•
•
sale under costs of CDs that were partly in
the charts
The Cartel Senate of the Bundesgerichtshof
rejected a jeopardy for competition on the
whole market under § 1 AUC 1909
Den Haag, NMa 2005
Glöckner
Sale under Costs under Unfair
Competition law
–
BGH, WRP 2003, 1101 – Foto-Aktion
•
•
•
•
Foto processing was offered by a drugstore at DM
0,01 per exposure
BGH rejected „excessive enticement“, because there
was no other sale tied to the foto processing
fact that customers enter drug store to bring in films
and pick up processed films doesn‘t make it illegal to
bait with almost free products
anticompetitive sale under costs, jeopardizing
competition on the market as a whole, had not been
pleaded by the plaintiff
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a
predatory pricing scheme
–
covered by § 19 para. 1 ARC: Abuse of
a dominant position:
㤠19 ARC: Abuse of a Dominant Position
(1) The abusive exploitation of a dominant
position by one or several undertakings shall
be prohibited.
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a predatory pricing scheme
–
covered by § 19 para. 1 ARC: Abuse of a dominant position
•
requires a dominant position as defined in § 19 para. 2, 3 ARC:
„(2) An undertaking is dominant where, as a supplier or purchaser of certain
kinds of goods or commercial services, it
1.
has no competitors or is not exposed to any substantial competition, or
2.
has a paramount market position in relation to its competitors; for this
purpose, account shall be taken in particular of its market share, its
financial power, its access to supplies or markets, its links with other
undertakings, legal or factual barriers to market entry by other
undertakings, actual or potential competition by undertakings established
within or outside the area of application of this Act, its ability to shift its
supply or demand to other goods or commercial services, as well as the
ability of the opposite market side to resort to other undertakings. Two or
more undertakings are dominant insofar as no substantial competition
exists between them with respect to certain kinds of goods or commercial
services and they jointly satisfy the conditions of sentence 1.
(3)
An undertaking is presumed to be dominant if it has a market share of at
least one third. …“
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a predatory pricing
scheme
–
covered by § 19 para. 1 ARC: Abuse of a dominant
position
•
–
requires a dominant position as defined in § 19 para. 2, 3
ARC
covered by § 20 para. 1 ARC: unjustified hindrance
(unbillige Behinderung):
„Dominant undertakings, associations of undertakings within
the meaning of Sections 2 to 8, 28 (1) as well as Section 29,
and undertakings which set retail prices pursuant to Sections
15, 28 (2), 29 (2) and Section 30 (1), shall not directly or
indirectly hinder in an unfair manner another undertaking in
business activities which are usually open to similar
undertakings, nor directly or indirectly treat it differently from
similar undertakings without any objective justification.“
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a predatory
pricing scheme
–
covered by § 19 para. 1 ARC: Abuse of a
dominant position
•
–
requires a dominant position as defined in § 19 para.
2, 3 ARC
covered by § 20 para. 1 ARC: unjustified
hindrance (unbillige Behinderung)
•
•
still requires a dominant position;
existence of provision has historic reasons: before the
6th amendment of the ARC (1999) it was necessary
to have a provision directly applicable for competitors,
as the predecessor of § 19 ARC was only armed with
administrative sanctions of the cartel authorities
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a predatory pricing scheme
–
covered by § 19 para. 1 ARC: Abuse of a dominant position
•
–
requires a dominant position as defined in § 19 para. 2, 3 ARC
covered by § 20 para. 1 ARC: unjustified hindrance (unbillige
Behinderung)
•
–
still requires a dominant position;
covered by § 20 para. 2 ARC (since 1989)
„Subsection (1) shall apply also to undertakings and associations of
undertakings insofar as small or medium-sized enterprises as
suppliers or purchasers of certain kinds of goods or commercial
services depend on them in such a way that sufficient or reasonable
possibilities of resorting to other undertakings do not exist.“
•
so-called relative market power
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs as a part of a predatory pricing scheme
–
covered by § 19 para. 1 ARC: Abuse of a dominant position
•
–
covered by § 20 para. 1 ARC: unjustified hindrance (unbillige
Behinderung)
•
•
–
still requires a dominant position;
existence of provision has historic reasons: before the 6th amendment of the
ARC (1999) it was necessary to have a provision directly applicable for
competitors, as the predecessor of § 19 ARC was only armed with
administrative sanctions of the cartel authorities
covered by § 20 para. 2 ARC
•
–
–
doesn‘t require dominant position, but only that other SME depend upon
addressee (relative market power)
price under costs per unit (evidence!)
intention to displace individual competitors
•
–
requires a dominant position as defined in § 19 para. 2, 3 ARC
usually based on objective evidence: no business justification (e.g. market
entry; sales promotion; out-stocking outmoded goods)
apt to displace competitors (wishful thinking not sufficient)
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
covered by § 19 para. 1 ARC: Abuse of a dominant
position
covered by § 20 para. 1 ARC: unjustified hindrance
(unbillige Behinderung)
covered by § 20 para. 2 ARC
price under costs per unit (evidence!)
no business justification
–
–
–
–
•
–
market entry; sales promotion; out-stocking outmoded
goods
apt to do away with competition on the relevant market
almost completely (jeopardy to the mere existence of
competition)
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
BGHZ 129, 203 – Hitlisten-Platten (1995)
–
standard of unjust exclusion under § 20 para. 2 ARC (ex§ 26 para. 4 ARC) requires balancing of interests
•
•
ARC doesn‘t tolerate intentional displacement
ARC doesn‘t tolerate the creation of impediments to SME‘s
business conduct to an extent that the structural
preconditions for effective competition are essentially
jeopardized
the latter requires
•
–
–
•
sale under costs not only occasional, but systematic
advertisement with sales under costs frequent and intensive
enough to give rise to the jeopardy to competition
action rejected, because chart-breaking records were
advertised at prices under costs only on nine days within
one half year
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
–
–
–
covered by § 19 para. 1 ARC: Abuse of a dominant
position
covered by § 20 para. 1 ARC: unjustified exclusion
(unbillige Behinderung)
covered by § 20 para. 2 ARC
covered by § 20 para. 4 s. 2 ARC (since 1999)
„(4) Undertakings with superior market power in relation to
small and medium-sized competitors shall not use their market
power directly or indirectly to hinder such competitors in an
unfair manner. An unfair hindrance within the meaning of
sentence 1 exists in particular if an undertaking offers goods or
services not merely occasionally below its cost price, unless
there is an objective justification for this.
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
covered by § 19 para. 1 ARC: abuse of a
dominant position
covered by § 20 para. 1 ARC: unjustified
exclusion (unbillige Behinderung)
covered by § 20 para. 2 ARC
covered by § 20 para. 4 s. 2 ARC (since 1999)
–
–
–
•
reaction to the Bundesgerichtshof‘s judgment
Hitlisten-Platten
„double analogy“
•
–
–
extension of the concept of relative market power (§ 20
para. 2 ARC) from vertical to horizontal relations
assessment of resources, cf. § 19 para. 2 no. 2 ARC
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
covered by § 19 para. 1 ARC: Abuse of a
dominant position
covered by § 20 para. 1 ARC: unjustified
exclusion (unbillige Behinderung)
covered by § 20 para. 2 ARC
covered by § 20 para. 4 s. 2 ARC (since 1999)
–
–
–
•
reaction to the Bundesgerichtshof‘s judgment
Hitlisten-Platten
„double analogy“
closing an apparent gap of protection:
•
•
–
–
doing away with requirement of jeopardy to competition
shift of burden of proof
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
first cases: Aldi-Nord, Wal*Mart, Lidl,
BKartA, 1.9.2000, WuW/E DE-V 314, 316:
prohibition to sell under costs; on appeal
OLG Düsseldorf, 19.12.2001, WuW/DE-R
781 - Wal*Mart: decision of the BKartA
quashed; on appeal on law BGH,
12.11.2002 – Wal*Mart: partly remanded
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
addressees of the provision:
»
it is immaterial whether or not there are other
powerful competitors
»
the provision wants to avoid a concentrative
process at an early stage
»
if competitor needs to react to (anti-)competitive
conduct of other powerful competitors, this relates
to a possible justification, but doesn‘t save him from
being an addressee of § 20 para. 4 ARC
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
–
addressees of the provision
sale under costs
» it is not necessary for the provision to be
applied that the addressee drops his sale
prices below costs
» it is sufficient, if the costs rise above the
continued sale price
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
–
–
addressees of the provision
sale under costs
„not just occasionally“: more than two months
sufficient
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
–
–
–
addressees of the provision
sale under costs
„not just occasionally“: more than two months
sufficient
no additional requirement of appreciability of
detriment to competition
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
–
–
–
–
addressees of the provision
sale under costs
„not just occasionally“: more than two months sufficient
no additional requirement of appreciability of detriment
to competition or jeopardy to competition
no need to show a causal link between market position
and sale under costs; legislator has created an
assumption that such link exists. Objective justification
is only way out of liability
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
(cont‘d) objective justification, because
competitors started price war and were first to sell
under costs?
» No! § 20 para. 4 ARC requires look at the
market as a whole. Conduct of individual
competitors as a rule cannot give rise to
justification
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
The results of Wal*Mart:
–
(cont‘d) objective justification, because competitors
started price war and were first to sell under costs?
»
No! § 20 para. 4 ARC requires look at the market as
a whole. Conduct of individual competitors as a rule
cannot give rise to justification
»
Exception: Irreparable damage + no means to
defend against anticompetitive conduct of
competitors (e.g. injunctive relief)
»
Exception granted, when cost prices rose in a
„hold-up“ like manner, competitor seeks for other
(cheaper) sources, which he finds subsequently
and bridges only a short period of time without
actively promoting price war
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
KG, 12.7.2001, WuW/E DE-R 727 - Dienstagspreise:
–
the concept of cost price („Einstandspreis“):
»
case dealt with ticket prices for movie theaters
»
term „cost price“ relates not to the calculated price
per unit (Selbstkosten), but to the price that was
paid to a supplier (Einstandspreis)
»
provision not applicable to goods that are produced
or services that are created
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
BKartA, 17.12.2003, WuW/E DE-V 911 –
Fotoarbeitstasche
–
–
–
–
the scope of § 20 para. 4 ARC exceeds the scope of § 1
AUC 1909 (now § 3 AUC), because jeopardy to
competition on the market as a whole is not required
the concept of cost price (Einstandspreise)
»
service prices can be cost prices under § 20 para. 4
ARC: Laboratory services for foto processing are
bought by drugstores and resold to end consumers
»
all rebates have to be included to calculate cost
price
not only occasionally: more than three weeks sufficient
no justification by competitors‘ conduct under recourse
to BGH – Wal*Mart
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory
pricing
–
§ 20 para. 4 ARC in action
•
VG Köln, 18.2.2005, CR 2005, 269
–
the scope of § 20 para. 4 ARC is limited by the
special provision in § 24 para. 2 no. 2 Act on
Telecommunikation 1996
Den Haag, NMa 2005
Glöckner
Sale under Costs under
Competition law
•
Sale under Costs without predatory pricing
–
§ 20 para. 4 ARC in action
•
OLG Hamburg, 20.11.2003, 3 W 127/03 – Verkäufe unter
Einstandspreis
–
§ 20 para. 4 ARC – an instrument for resale price
maintenance?
»
The producer tried to enjoin a distributor from selling his
goods under price
»
no standing to sue under § 33 ARC 1998
»
help from § 1 AUC 1909 (now §§ 4 no. 11, 8 para. 3 no. 1
AUC? anticompetitive advantage through an infringement
»
court rejects: system of limited standing to sue under § 33
ARC would be frustrated, if violation of § 22 para. 4 s. 2
ARC was considered a violation giving rise to a
competitive advantage under § 4 Nr. 11 AUC
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory pricing scheme („in
Verdrängungsabsicht“)
–
prohibition based on competition law is economically sound
•
•
•
•
•
•
•
•
the grounds for prohibition, however, cannot be the bad intention,
but only the negative effect on competition
market participants will enter into „real“ predatory pricing only, if
they are sufficiently secure (1) to succeed, (2) to recoup their
investment
the latter is only possible, if the predatory pricing leads to
monopolistic market structures
it is only fair to hold them by their conduct
the problem is to identify „real“ predatory pricing
seldom do we find direct evidence (blackmailing letters; board
minutes)
when relying on indirect evidence it is essential to exclude good
business reasons
(cf. Art. 7 para. 2 let. d Swiss Cartel Act)
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory
pricing scheme („in Verdrängungsabsicht“)
–
•
prohibition based on competition law is
economically sound
Sale under Costs without predatory pricing
scheme
–
prohibition based on jeopardy to competition on
the market as a whole is theoretically plausible,
but …
•
… very hard to prove for plaintiff in an individual case
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory
pricing scheme („in Verdrängungsabsicht“)
–
•
prohibition based on competition law is
economically sound
Sale under Costs without predatory pricing
scheme
–
prohibition based on jeopardy to competition on
the market as a whole is theoretically plausible,
but …
•
•
… very hard to prove for plaintiff in an individual case
… legal assumption not very plausible: will pricing
practice really ultimately lead to a weakening of
competition?
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory pricing scheme („in
Verdrängungsabsicht“)
–
•
prohibition based on competition law is economically sound
Sale under Costs without predatory pricing scheme
–
prohibition based on jeopardy to competition on the market as
a whole is theoretically plausible, but …
•
•
•
… very hard to prove for plaintiff in an individual case
… legal assumption not very plausible: will pricing practice really
ultimately lead to a weakening of competition?
… somewhat old-fashioned with regard to Industrial Economics:
the state‘s role as a kind of preserver of endangered species is no
longer acceptable. This holds particularly true, where there is fierce
competition between big competitors (LP records case)
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory pricing scheme („in
Verdrängungsabsicht“)
–
•
prohibition based on competition law is economically sound
Sale under Costs without predatory pricing scheme
–
prohibition based on jeopardy to competition on the market as
a whole is theoretically plausible, but …
•
•
•
–
… very hard to prove for plaintiff in individual cases
… legal assumption not very plausible: will pricing practice really
ultimately lead to a weakening of competition?
… somewhat old-fashioned with regard to Industrial Economics:
the state‘s role as a kind of preserver of endangered species is no
longer acceptable. This holds particularly true, where there is fierce
competition between big competitors (LP records case)
prohibition independent of any appreciable detriment to
competition
•
•
is even harder to justify
„Mittelstandsschutz“ at its worst
Den Haag, NMa 2005
Glöckner
Sale under Costs Some Conclusions
•
Sale under Costs under a predatory pricing scheme („in
Verdrängungsabsicht“)
–
•
prohibition based on competition law is economically sound
Sale under Costs without predatory pricing scheme
–
prohibition based on jeopardy to competition on the market as
a whole is theoretically plausible, but …
•
•
•
–
… very hard to prove for plaintiff in individual cases
… legal assumption not very plausible
… somewhat old-fashioned with regard to Industrial Economics
prohibition independent of any appreciable detriment to
competition
•
•
–
is even harder to justify
„Mittelstandsschutz“ at its worst
alternative solutions
•
•
Art. 3 let. f Swiss AUC: assumption of misleading effect with regard
to overall price level
increased control of purchasing power
Den Haag, NMa 2005
Glöckner