Introduction
This essay examines whether the conduct of Your Health Germany GmbH and No Virus Ltd, in agreeing to inform each other about pricing changes and subsequently aligning their pricing patterns, breaches European Union (EU) law. The analysis focuses on EU competition law, specifically provisions under the Treaty on the Functioning of the European Union (TFEU), which prohibits anti-competitive agreements and practices. The essay will evaluate the nature of the agreement, assess the market context, and consider the legal implications for Michael as a director. Ultimately, it aims to provide a reasoned conclusion on the potential breach of EU law and its consequences.
Legal Framework: EU Competition Law
EU competition law, enshrined in Articles 101 and 102 of the TFEU, seeks to prevent practices that distort the internal market. Article 101(1) prohibits agreements, decisions, and concerted practices between undertakings that have the object or effect of restricting competition within the EU, provided they affect trade between Member States (Craig and de Búrca, 2020). Such agreements are void unless they meet exemption criteria under Article 101(3), for instance, by offering consumer benefits or promoting innovation. Article 102, meanwhile, addresses the abuse of a dominant position, which may be relevant given Your Health Germany’s significant market share.
The informal agreement at the Christmas party in December 2024, where directors of Your Health Germany and No Virus Ltd decided to coordinate pricing notifications, arguably falls within the scope of Article 101(1). Even informal arrangements can constitute prohibited “concerted practices” if they reduce uncertainty in the market and influence competitive behaviour (Jones and Sufrin, 2016). The subsequent pattern of aligned price increases and reductions since mid-2025 further suggests a de facto coordination that could restrict competition.
Market Context and Effect on Competition
Your Health Germany holds 39% of the EU market for antiviral herbal medicines, while No Virus Ltd holds 30%, collectively dominating a significant portion of the market. This substantial combined market share indicates that coordinated pricing could have a pronounced effect on competition, potentially leading to higher prices for consumers across the EU (Whish and Bailey, 2021). Moreover, as Your Health Germany operates an online platform facilitating sales to pharmacies and hospitals, the impact of price coordination could extend widely across Member States, fulfilling the requirement that the agreement affects trade between Member States.
Indeed, the European Commission and Court of Justice of the European Union (CJEU) have consistently ruled that agreements on price coordination, even if not formally binding, can breach Article 101(1) if they influence market behaviour (Case C-8/08, T-Mobile Netherlands). Given this precedent, the conduct of Your Health Germany and No Virus Ltd appears prima facie to contravene EU law by reducing competitive uncertainty and potentially harming consumer welfare through harmonised pricing.
Potential Exemptions and Defences
It is worth considering whether the agreement could qualify for an exemption under Article 101(3). For an exemption to apply, the agreement must contribute to improving production or distribution, or promote technical or economic progress, while allowing consumers a fair share of the resulting benefits (Whish and Bailey, 2021). However, there is no evidence in the scenario to suggest that the pricing coordination offers such advantages. Typically, price-fixing or coordination lacks pro-competitive justifications, as it primarily benefits the undertakings involved rather than consumers. Therefore, it is unlikely that an exemption would apply in this case.
Implications for Michael
As a director of Your Health Inc., which controls Your Health Germany, Michael may face indirect liability for the subsidiary’s actions if he was complicit in organising or endorsing the agreement. Under EU competition law, parent companies can be held responsible for the anti-competitive conduct of subsidiaries if they exercise decisive influence over them (Case C-97/08, Akzo Nobel). While Michael’s personal assets in Luxembourg and Switzerland are generally beyond the reach of EU enforcement, his role in facilitating the agreement could expose him to scrutiny by the European Commission, potentially resulting in reputational or professional consequences within the EU.
Conclusion
In conclusion, the conduct of Your Health Germany and No Virus Ltd, involving an informal agreement to coordinate pricing and subsequent aligned pricing patterns, likely breaches Article 101(1) TFEU by restricting competition within the EU market for antiviral herbal medicines. The significant market shares of both companies, coupled with the cross-border impact of their actions, reinforce the likelihood of an infringement. Furthermore, the agreement does not appear to meet the criteria for an exemption under Article 101(3). For Michael, while personal financial liability may be limited, his involvement could attract regulatory attention and damage his standing. It is advisable for Michael to seek legal counsel to mitigate potential risks and ensure compliance with EU competition law in future dealings.
References
- Craig, P. and de Búrca, G. (2020) EU Law: Text, Cases, and Materials. 7th edn. Oxford University Press.
- Jones, A. and Sufrin, B. (2016) EU Competition Law: Text, Cases, and Materials. 6th edn. Oxford University Press.
- Whish, R. and Bailey, D. (2021) Competition Law. 10th edn. Oxford University Press.
