Journal Article

Competition policy in modern retail markets

Hans W. Friederiszick and Ela Głowicka

in Journal of Antitrust Enforcement

Volume 4, issue 1, pages 42-83
Published in print April 2016 | ISSN: 2050-0688
Published online November 2015 | e-ISSN: 2050-0696 | DOI: https://dx.doi.org/10.1093/jaenfo/jnv030
Competition policy in modern retail markets

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With e-commerce having accelerated over recent years, retailing has changed significantly. Manufacturers and retailers have established multichannel (offline/online) strategies within which pricing restraints often constitute a central element. Behind these strategies sits the firms’ ambition to find a solution to free-riding. Free-riding results in non-optimal service levels and price setting and thus offers a business justification for pricing restrains which, in many instances, are viewed as infringements under Article 101 or 102 Treaty on the Functioning of the European Union (TFEU). In this article we map out the alignment of characteristics of products targeted by recent antitrust enforcement in Europe with the likelihood of free-rider effects taking place. Specifically in the case of products with search and experience characteristics, we find intensive enforcement activity despite prevalent free-rider effects.

Keywords: retail competition; externalities; free-riding; vertical restraints; cross-channel shopping; competition law; K21; L42; L81

Journal Article.  15311 words.  Illustrated.

Subjects: Antitrust Issues and Policies ; Services

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