Previous business/academic article Next business/academic article
Academic Articles Awards > Unilateral Conduct

The law and economics of most-favoured nation clauses

Francisco Enrique Gonzalez-Diaz and Matthew Bennett, Competition Law & Policy Debate, Volume 1, Issue 3, August 2015

See Matthew Bennett's resume See Francisco Enrique Gonzalez-Diaz's resume

Vote for this articleHelp

* Average
** Interesting
*** Good
**** Excellent
***** Must receive an Award!

Please note that the star(s) appearing on the article page before you have voted reflect the status of all votes registered to date.

Readers’ vote will close on February 15, 2016. Readers’ vote will allow you to nominate 1 article for each of the Awards, i.e., 10 Academic articles, 10 Business articles, and the best Soft Laws. The readers’ short-list of Academic and Business Articles will be communicated to the Board together with the 20 articles nominated by the Steering Committees. The Board will decide on the award-winning articles. Results will be announced at the Awards ceremony to take place in Washington DC on the eve of the ABA Antitrust Spring Meeting on April 5, 2016.

Most favoured nation clauses (“MFNs”) , i.e., agreements whereby a seller agrees that a buyer will benefit from terms that are at least as favourable as those offered by the seller to any other buyer,1 have come under scrutiny in recent years in the European Union (“EU”), the United States (“US”) and beyond. Whilst the main focus of this scrutiny has been initially on the so-called wholesale MFNs, there has been a growing interest in cases involving ‘retail price’ MFNs. In these cases the MFN agreement references the end retail price rather than the wholesale price that traditional MFNs refer to. Although since the E-Books case (a “retail MFN” case), which was settled in 2013,2 the European Commission (“the Commission”) had not assessed the competitive impact of MFNs, it has recently opened a formal antitrust investigation into certain business practices carried out by Amazon in the online distribution of books. In particular, the Commission is investigating whether certain clauses included in Amazon’s contracts with publishers, which through different means ensure that Amazon, is offered terms at least as good as those offered to its competitors, are compatible with EU competition law. Similar MFNs, such as those included into contractual provisions for online hotel reservation services, have also been scrutinised by certain national competition authorities (“NCAs”) of the EU. In addition, both the German and the UK authorities have taken issue with Amazon’s “price parity” policy and the United Kingdom’s Competition Markets Authority (“CMA”) has recently opened an investigation into MFNs relating to motor insurance price comparison websites. Despite this relatively recent interest, there does not appear to be clear guidance at either EU or national level as to how to assess MFNs from a competition law perspective, specifically with regard to MFNs that reference the retail price rather than the wholesale price. This article aims at providing a broad frame of reference for analysing this type of clauses, based on the case-law and practice of the European Courts and the European Commission.

Download our brochure