Predatory Pricing Report

European Union

Country	Predatory Pricing Prohibition	Comment
EU Generally	1	Article 82 (formerly Article 86) of the EC Treaty prohibits predatory pricing. The Commission began prosecuting predatory pricing in 1985, in the AKZO case. This case led to the establishment of a two-pronged test for predatory pricing. A firm was guilty of the offense if it either: Sets the price at below average variable cost. This amounts to a per se assumption of abusive behavior. Sets the price at below average total cost, but above average variable cost. This is also assumed to be predatory, but requires a specific plan by the firm to eliminate competitors.
Austria	1	§31(1)(5) of the Federal Act of 19 October 1988 on Cartels and other Restrictive Trade Practices prohibits the sale of goods below cost price when it cannot be justified on material grounds.
Belgium	1	Articles 40-41 of The Commercial Practices Act of July 14, 1991 forbid reselling products at a loss.
Bosnia-Herzegovina	1	Act on Competition of 2005 is supplemented by the Regulation on Definition of a Dominant Posision of 2006. Article 9(c) of this by-law prohibits "fixing a price of the product or service below the production costs with the view to eliminate the competitors."
Cyprus	0	No prohibition on predatory pricing found.
Czech Republic	1	§11(1)(e) of the Consolidated Act on the Protection of Competition prohibits by a Dominant firm "consistent offer and sale of goods for unfairly low prices, which results or may result in distortion of competition."
Denmark	1	The Danish Monopolies and Restrictive Practices Supervision Act of 1955 forbids predatory pricing.
Estonia	0	No prohibition on predatory pricing found.
Finland	1	Article 7(4) of the Act on Competition Restrictions (480/1992) makes, "a pricing practice which is unreasonable or obviously aimed at restricting competition" an abuse of a dominant position.
France	1	French Competition Act (Ordinance no. 86-1243 of December 1, 1986 (amended July 9, 1999) "Article 10-1: Price offers or price practices with respect to consumer sales prices that are abusively low in relation to the costs of production, transformation, and marketing are prohibited, since these offers or practices have as their purpose, or may have as their effect, to eliminate from a market or to prevent access to a market by an enterprise or one of its products." (Note: This Article has been used only rarely by enforcement agencies.)
Germany	1	Section 20(4) of Act Against Restraints of Competition states that dominant firms cannot use their market power to hinder competitors in an "unfair manner," which occurs when a firm "offers goods or services not merely occasionally below its cost price . . . ."
Greece	1	Courts have interpreted predatory pricing as an abuse of a dominant position.
Hungary	1	Article 21(h) of Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices as amended, effective November 1, 2005 makes it prohibited to "set extremely low prices which are not based on greater efficiency in comparison with that of competitors and which are likely to drive out competitors from the relevant market or to hinder their market entry[.]"
Ireland	0	The enforcement agency has investigated an alleged abuse of predatory pricing, but found it did not constitute an abuse and was instead, "intense competition."
Italy	0	Italy has no prohibition on predatory pricing. However, "it is foreseeable that the same principles set forth in EC law to prohibit predatory price cutting by a dominant undertaking may be applied."
Latvia	0	Latvia has no explicit prohibition on predatory pricing. However, "[p]redatory pricing by definition as a practice aimed at hindrance, restriction or distortion of competition would qualify as an abuse of dominant position.
Lithuania	1	Lithuania's competition authority includes predatory pricing in its definition of an abuse of a dominant position. This definition is found in an intra-agency bylaw, a supplement to their more general competition legislation.
Luxembourg	1	Below cost selling of goods and services is prohibited under the Act on Commercial Practices, Unfair Competition and Comparative Advertising (July 2002).
Malta	1	Article 9(2)(b) of Chapter 379 Competition Act of Malta forbids "charg[ing] prices which are below the average variable cost price of a product in order to drive rival competitors out of the market[.]"
Netherlands	0	Dutch law does not forbid resale at a loss, either.
Poland	1	Article 8(2)(1) of The Act on Protection of Competition and Consumers prohibits "direct or indirect imposition of unfair prices, including predatory prices or prices glaringly low."
Portugal	1	Decree-Law 370/93 of October 29, 1993 (as amended by Decree-Law 140/98) forbids selling goods at a price below the actual price of purchase (plus taxes and transportation costs).
Saudi Arabia	1	Article 5(1) of the Competition Law of 2004 prohibits "selling a commodity or service at a price below cost, with the intention of forcing competitors out of the market."
Slovak Republic	1	The Slovak Republic forbids abusive acts by a dominant firm seeking to exclude competition. The Antimonopoly Office of the Slovak Republic (their enforcement agency) has used this provision to prosecute temporary predatory pricing of fuels, but the decision was never given effect, as the defendant discontinued its pricing scheme.
Slovenia	0	No predatory pricing provision found. Office for Protection of Competition received one complaint of predatory pricing against Produkcija Plus d.o.o. - RTV Slovenia d.o.o. on 2/20/01. However, the complaint was dismissed (Office did not rule on the merits).
Spain	1	There are two cases where the courts have issued fines for predatory pricing: 1. General Electric Espana[20] - GE's local affiliate was fined Pta 15 million (~90,000 euros) 2. Arbora/Ausonia Predatory pricing, presumably, is covered by common law because there is no mention of it in the Spanish competition laws. Note: More recently, Telefónica, a Spanish firm, was fined by £102.6m (€152m) by the EU competition agency.
Sweden	0	No predatory pricing provision found.
United Kingdom	1	Chapter II of the Fair Trading Act of 1973 prohibits predatory pricing. The OFT has published the following guidelines to assess whether pricing schemes are predatory: Price below average variable cost Predation can be assumed Price below average variable cost but below average total cost Evidence on costs may indicate predation but evidence required of intention to eliminate a competitor before predation could be found Price above average total costs Evidence on costs does not indicate predation The Competition Act of 1980 is also at the disposal of the Director General of the Office of Free Trade (OFT) for the prohibition of predatory pricing.
United States	0	Though predatory pricing is formally prohibited, the United States has not prosecuted a firm due to predatory pricing since the 1980's.
Zimbabwe	1	Amendment 14 of 2001 to the The Competition Act of 1996 prohibits "[s]elling at very low prices or at below production costs as a deliberate strategy of driving competitors off the market."