Unilateral Collusion: (Mere) Conscious Parallelism or (Illegal) Concerted Practice? The Case of Competitor-Based Pricing Guarantees

Abstract Oligopolistic price-setting has been at the core of antitrust enforcement ever since its existence. Consensus about exempting pure conscious parallelism (tacit collusion) from competition law scrutiny had quickly been reached, which means that non-competitive market conduct by several undertakings is only scrutinized if it was established by certain preceding collusive behavior. The necessary constituents of such illicit collusion, however, are subject to an ongoing debate. This holds particularly true for cases of unilateral collusion where non-competitive market conduct was established based on the individual use of a facilitating practice by (sometimes) only one firm. Competitor-based pricing guarantees by which a company promises to match a competitor’s lower price can serve as an illustration. Economic research shows that such guarantees can impede competition: a firm can deter its rivals from undercutting its price because the resulting quantity effect is lower than usual. At first glance, with “concerted practices'' in Art. 101 TFEU, European competition law provides a suitable tool to tackle such behavior. Under traditional doctrine, however, the concept is not applied to collusion following the individual use of facilitating practices. This notion is put into question, and a new approach distinguishing between (lawful) conscious parallelism and (illegal) unilateral collusion is presented.