Excessive pricing cases are relatively rare. They are notoriously tricky to prove.
The Italian Competition Authority (ICA), however, remains undeterred. At the end of March, it finedCaronte & Tourist EUR3.7m for unjustifiably charging excessive rates on a ferry route across the Strait of Messina.
The ICA found that the ferry operator is the only company to offer passenger and vehicle transport on the route and that the majority of motorists favour it over other routes. The ICA also found a "significant disproportion" between the operator's costs and revenues, and that prices were unreasonably high in comparison to international benchmarks given the operator's poor quality of service.
Until this case, ICA excessive pricing enforcement has focussed on the pharmaceutical sector. Indeed, the ICA is expected to reach a decision next month on whether Leadiant Biosciences charged excessive prices for an "orphan drug". Likewise, the European Commission (EC) and the UK's Competition and Markets Authority have enforced against excessive pricing in the industry. See, for example, our February 2021 article on behavioural commitments agreed between the EC and Aspen.
With health services under financial pressure in the wake of the Covid-19 pandemic, the pricing practices of dominant pharmaceutical companies will remain under scrutiny. But we may also now see excessive pricing enforcement spill over into other sectors, in particular in light of the recent joint statement by the European Competition Network on the application of competition law in the context of the war in Ukraine (discussed in the March edition of Antitrust in focus), which notes that "it is of utmost importance to ensure that essential products (for example energy, food, raw materials) remain available at competitive prices". Antitrust authorities, including the ICA, will use rules against excessive and unfair prices as part of the armament of antitrust laws to deter firms from taking advantage of the current economic crisis.
Originally published 4 May, 2022
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