Cover pricing and the overreach of ‘object’ liability under Article 101 TFEU

Stephan, Andreas ORCID: https://orcid.org/0000-0002-9839-7338 and Hviid, Morten (2015) Cover pricing and the overreach of ‘object’ liability under Article 101 TFEU. World Competition, 38 (4). pp. 507-526. ISSN 1011-4548

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Abstract

This article uses the example of cover pricing to show a possible overreach of liability under Article 101 TFEU, in relation to arrangements deemed to have the ‘object’ of restricting competition. Cover pricing is where a bidder seeks a non-winning bid from a competitor so that he can participate in a tender process without securing the contract. The wide meaning of ‘concerted practice’ means that a potential breach of Article 101 may arise even where the party receiving the request refuses to provide a cover bid. It is important that a restriction by object (which leads to the finding of an infringement regardless of whether the practice was implemented or had any harmful effect) applies only to the most serious arrangements between undertakings. It is shown that cover pricing very rarely has any anti-competitive effect and indeed the alternative (lawful) behaviour, of openly announcing a non-intention to win the contract, is more likely to reduce competition. It is nevertheless treated as an object restriction, mainly because it involves direct communication between competitors of pricing intentions. Article 101 may therefore be unable to distinguish some arrangements with ambivalent effects from the most serious cartel practices. It is argued that a greater effects analysis is needed (either in applying the law or calculating penalties), to ensure fairness and proportionality.

Item Type:	Article
Uncontrolled Keywords:	antitrust,competition law,cover pricing,article 101,object
Faculty \ School:	Faculty of Social Sciences > School of Law
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Competition, Markets and Regulation Faculty of Medicine and Health Sciences > Research Centres > Business and Local Government Data Research Centre (former - to 2023) Faculty of Social Sciences > Research Groups > Media, Information Technology and Intellectual Property Law Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Depositing User:	Pure Connector
Date Deposited:	22 Jan 2016 12:00
Last Modified:	02 May 2024 18:14
URI:	https://ueaeprints.uea.ac.uk/id/eprint/56749
DOI:	10.54648/woco2015041

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