Introduction
This essay examines whether the conduct of Your Health Germany GmbH and No Virus Ltd, following an informal agreement on pricing coordination at a Christmas party in December 2024, constitutes a breach of European Union (EU) competition law. The focus will be on the relevant provisions of the Treaty on the Functioning of the European Union (TFEU), specifically Article 101, which prohibits anti-competitive agreements. The essay will assess the nature of the agreement, its impact on the EU market for antiviral herbal medicines, and the legal implications for the companies involved. Furthermore, it will outline potential consequences for Michael as a director. Through this analysis, the essay aims to provide a sound understanding of EU competition law principles and their application to the given scenario.
EU Competition Law and Article 101 TFEU
EU competition law seeks to ensure fair competition and prevent practices that undermine the internal market. Article 101(1) of the TFEU prohibits agreements between undertakings that have as their object or effect the restriction of competition within the EU, particularly where such agreements affect trade between Member States (European Union, 2012). This includes price-fixing arrangements, which are generally considered among the most severe forms of anti-competitive conduct. As noted by Whish and Bailey (2021), price-fixing agreements are typically deemed to restrict competition by their very nature, without the need to prove actual market effects.
In the present case, Your Health Germany (39% EU market share) and No Virus Ltd (30% EU market share) together control a significant portion of the antiviral herbal medicines market. Their informal agreement to inform each other before altering prices, followed by a consistent pattern of similar price increases and reductions since mid-2025, suggests a form of price coordination. Such behaviour arguably falls within the scope of Article 101(1) as it limits the independent pricing decisions of the competitors, thereby potentially distorting market dynamics.
Impact on Trade and Market Competition
For Article 101(1) to apply, the agreement must have an appreciable effect on trade between Member States. Given that both companies operate across the EU—Your Health Germany through its online platform and No Virus Ltd as an Irish entity—their conduct is likely to influence cross-border trade (Jones and Sufrin, 2016). Moreover, with a combined market share of 69%, their pricing alignment could reduce consumer choice and lead to higher prices, thus undermining competition within the internal market. However, it must be acknowledged that establishing an actual effect on competition may require further evidence of market harm, which is beyond the scope of this analysis.
Legal Implications and Defences
If the European Commission or a national competition authority investigates, the agreement’s informal nature does not exempt it from scrutiny; even verbal or tacit agreements can breach Article 101(1) (Whish and Bailey, 2021). Typically, exemptions under Article 101(3) are possible if the agreement offers consumer benefits or promotes innovation, but price-fixing arrangements rarely qualify for such exemptions due to their inherently anti-competitive nature.
For Michael, as a director, personal liability may not directly arise under EU competition law, which primarily targets undertakings. However, national laws in Germany or other Member States might impose penalties on individuals for facilitating such conduct, and reputational damage could be significant.
Conclusion
In summary, the conduct of Your Health Germany and No Virus Ltd likely breaches Article 101(1) TFEU due to the apparent coordination of pricing, which restricts competition and affects trade between Member States. The substantial market share of both companies further exacerbates the potential harm to consumers and the internal market. Michael should be advised to seek legal counsel to assess the full extent of the agreement and consider immediate steps to terminate any coordinated pricing practices. The broader implication is a reminder of the stringent application of EU competition law, even to informal arrangements, highlighting the need for compliance to avoid severe fines and reputational risks. Indeed, proactive measures could mitigate potential legal consequences for both the companies and their directors.
References
- European Union. (2012) Consolidated Version of the Treaty on the Functioning of the European Union. Official Journal of the European Union, C 326/47.
- Jones, A. and Sufrin, B. (2016) EU Competition Law: Text, Cases, and Materials. 6th ed. Oxford University Press.
- Whish, R. and Bailey, D. (2021) Competition Law. 10th ed. Oxford University Press.
