2014 has witnessed continued enforcement efforts in vertical agreements, with a number of agencies closely interested in: (i) vertical restraints, with a particular focus on e-commerce markets and their impact on bricks and mortar outlets; and (ii) the potential detrimental effects of the exchange of competitively sensitive information via third parties such as customers and suppliers.

Pricing practices

Practices such as resale price maintenance (RPM - the enforcement of minimum or recommended retail prices by suppliers), retail-level most-favoured nation clauses (MFNs - where a seller promises or is obliged to set a price for a particular product/channel which is pegged to the price of another product/channel) are current hot topics in international antitrust enforcement, particularly in the fast-moving online trading world.

Companies can expect information exchange infringement issues to gather pace across Europe and the US. Businesses need to appreciate the fine legal line which can be crossed when communicating confidential information, particularly about future intentions, to their suppliers and/or customers. Special care is required where the customer is also a competitor.

Internet minimum advertised prices (IMAP - where the supplier of a product/service places restrictions on what prices a distributor/retailer can display on online channels) are also attracting interest from the regulators.

A few clear trends have emerged in 2014:


  • It is well known that the US has historically adopted a different approach to RPM compared to Europe and parts of Asia. The US ‘rule of reason’ approach focuses on the need to assess whether any benefits from RPM practices may outweigh competitive harm, rather than outright prohibiting these practices. Most recently, the Australian competition authority also applied a rule of reason approach and granted an exemption from the ban on minimum prices for complex, highly differentiated products, recognising that the need to prevent free-riding in the specific case at hand outweighed clear, but limited consumer detriment. However, other jurisdictions take a more interventionist approach with potential serious implications for global agreements of internationally operating companies.
  • Several national competition authorities in Europe continue to adopt a strict approach to RPM and treat RPM as a per se infringement, despite the efficiencies defence recognised by the European Commission in its Vertical Block Exemption Guidelines (particularly in the online world). At a national level, the German Bundeskartellamt has taken a vigorous approach against companies in tackling RPM cases, with on going investigations in a number of product categories including pet food, coffee, confectionery, beer, baby food and personal care and involving more than 70 manufacturers and retailers. RPM is also the most complained about practice in the UK, resulting in a growing number of enforcement cases, including investigations into sectors as diverse as online travel agents, eBooks and sports bras.;
  • RPM is increasingly high on the list of priorities of antitrust enforcement agencies in China (see theme 6). The Chinese National Development and Reform Commission’s decisional practice confirms a robust approach against RPM. We expect the Hong Kong authority to take a similar approach under its new competition law.

MFN clauses   

  • Price parity or MFN clauses may act as a catalyst for entry in fast-growing and dynamic markets. However, their ability potentially to restrict the sellers’ freedom to set prices, raise barriers to entry and soften competition at the downstream level, means that MFNs are increasingly under scrutiny. The Bundeskartellamt has condemned MFNs in the hotel online booking sector as an infringement of competition law by object and effect. The French, Italian and Swedish authorities are currently market testing a set of commitments offered by Booking.com to address concerns about the potential anti-competitive effects of its MFN clauses. There currently appear to be at least 7 investigations into that industry by national agencies in Europe alone (Austria, France, Germany, Ireland, Italy, Sweden and the UK - a number of other agencies are also rumoured to be interested in examining the issues) as well as investigations in Switzerland and China. ‘Wide’ MFNs, i.e. provisions that require parity across all distribution channels, have been found to be anticompetitive in the UK private motor insurance sector. 


  • Some antitrust authorities are now starting to ask about the impact of IMAPs. Their concern is that they may reduce the incentive for customers to shop around and find the best price for a particular product and potentially amount to an online sales ban. In addition, in some circumstances, IMAPs may facilitate horizontal collusion. 

In Germany, the Bundeskartellamt has been at the forefront of vertical enforcement, spearheading a number of investigations in a range of product categories. I expect the Bundeskartellamt to impose substantial fines and I think we will see other regulators across the globe also taking a more proactive stance.”

Information exchange

Competition authorities remain increasingly vigilant for practices designed to co-ordinate or facilitate the co-ordination of market behaviour, including when this is achieved by way of exchange of competitively sensitive information via customers or suppliers. This is a difficult area where the boundaries between legitimate and problematic information exchanges are not always self-evident.  

Hub and spoke issues continue to be a fertile hotbed for potential infringement, and competition agencies are taking an interest in such conduct, building upon a number of decisions in the UK and the US. For example, the Polish competition authority recently issued fines for several hub and spoke infringements in the pet food market. 

Looking ahead to 2015

  • RPM risks

Ensure that your contracts and business conduct in supplier-distributor relations do not directly or indirectly give rise to RPM, particularly in the online world.  The focus should be on compliance in these areas and on achieving clarity on whether the agreement gives rise to efficiencies capable of justifying a restriction.

  • MFN risks

Antitrust enforcers are increasingly interested where: (i) the company seeking the MFN has significant market power and it can be shown that the risk of anticompetitive exclusion outweighs the potential pro-competitive benefits; (ii) there is a network of parallel agreements, which could lead artificially to increased price transparency; or (iii) the MFN is used to facilitate price co-ordination among suppliers. 

  • IMAP risks

 We are seeing the first signs of real agency interest in this area in Europe.  For businesses active in online selling, this needs to be a compliance focus. 

  • Global nature of issues

 Companies with an international footprint need to appreciate the increased proactivity of regulators across a range of jurisdictions and the risk of parallel investigations, as well as the potential discrepancies in approach.