Clifford Chance

Linking Prices: Risky Relationships?

9 October 2012

Agreements which set prices by reference to other transactions – such as sales of rivals' products, sales to other customers, or sales on different platforms - are of increasing interest to antitrust authorities on both sides of the Atlantic.

Price relationship agreements (PRAs) - including most favoured nation (MFN) clauses - are not new.  They have been present in contracts and accordingly subject to competition law for decades.

Recently,  however, competition authorities in both the UK and US have shown renewed interest in them in the online world. On 10 September 2012, the OFT published a report it had commissioned from Laboratorio di economia, antitrust, reglamentazione (Lear) which examines the possible competition concerns that may arise from PRAs.  In the US, the Department of Justice (DOJ) and the Federal Trade Commission held a joint workshop entitled "Most-Favored-Nation (MFN) Clauses and Antitrust Enforcement and Policy".

So why the renewed interest?  One explanation could be the rise in this type of clause in contracts relating to online services, which have been the subject of a number of recent competition cases, such as the e-books cases in the US, EU and UK (the latter now closed).

This briefing summarises the conclusions of the Lear report, as well as the recent cases which have been the object of scrutiny of the antitrust authorities in the EU, UK and US.

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