The long list of practices violating EU competition law just got longer: in Container Shipping, the European Commission confirmed that the unilateral publishing of pricing information, in public media, can violate Article 101 TFEU.1
In this case, the Commission expressed concern that the practice of fourteen container liner shipping companies (“Carriers”) to publish intentions to increase prices may harm competition. The Carriers regularly announced intended increases of freight prices on their websites, via the press, or in other ways. The announcements were made several times a year and included the level of increase and the date of implementation. The Carriers were not bound by the announced increases and some of them postponed or modified the price increases after announcement.
The Commission expressed concern that price signalling “may not provide full information on new prices to customers but merely allow carriers to explore each other’s pricing intentions and coordinate their behaviour.“2 According to the Commission, announcing future price increases may signal intended market conduct and by reducing the level of uncertainty about pricing behaviour, decrease the incentives of competitors to compete against each other.
The Commission closed the investigation subject to commitments under which the Carriers offered to:
- stop publishing and communicating price increases expressed as an amount or percentage of the change;
- making pricing more transparent for customers; and
- limiting the time window for any price announcements.3
The commitments apply for a period of three years, starting from 7 December 2016.
The Dutch authority for consumers and markets (the “ACM”), in 2014, raised similar concerns in respect of three mobile network operators (“MNOs”), which had made public announcements about future strategies and statements of intent on future price increases at telecom conferences and in telecom-focused media,4 which, were not binding at the time at which they were made. The ACM found that the announcements reduced strategic uncertainty in the market which may have allowed for coordination on strategy by competitors to the detriment of consumers. To resolve the ACM’s concerns, the MNOs offered commitments aimed at eliminating “the risk that announcements in the public domain will be made jointly to bring about higher prices“, including:5
- refraining from public statements about any intention to change commercial polices that might not benefit consumers when the company’s internal decision to adopt the change is not yet final; and
- setting up compliance programs to ensure that senior management do not make such announcements.
- Announcing price increases is a normal part of doing business. In the bulk of cases it raises no EU competition concerns.
- But in certain circumstances, for example where the price information is intended primarily for competitors rather than for customers, or where the announcements are non-binding, they may infringe EU competition law.
- Going forward, companies conducting business in the EU should assess the intent and effect of price announcements and should not simply assume that such announcements raise no concerns because they are made unilaterally in public media.