Introduction
This essay examines whether the conduct of Your Health Germany GmbH and No Virus Ltd, following an informal agreement on pricing strategies during a Christmas party in December 2024, constitutes a breach of European Union (EU) competition law. The focus is on the application of Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits anti-competitive agreements that may affect trade between Member States. The essay will outline the legal framework, analyze the behavior of the companies involved, and assess whether their actions—specifically, the coordinated price adjustments since mid-2025—violate EU law. By doing so, it aims to provide Michael, a director of Your Health Inc, with informed advice on the potential legal implications of this conduct.
Legal Framework: EU Competition Law and Article 101 TFEU
EU competition law seeks to ensure a level playing field within the internal market by prohibiting practices that restrict competition. Article 101(1) TFEU explicitly bans agreements between undertakings, decisions by associations of undertakings, and concerted practices that may affect trade between Member States and have as their object or effect the prevention, restriction, or distortion of competition (European Union, 2012). Notably, this includes price-fixing arrangements, whether explicit or tacit, as they undermine consumer choice and market efficiency. In the context of Your Health Germany (39% EU market share in antiviral herbal medicines) and No Virus Ltd (30% market share), their combined dominance—exceeding 60% of the EU market—raises significant concerns about potential anti-competitive behavior.
Analysis of Conduct: Informal Agreement and Price Coordination
The informal agreement reached during the December 2024 Christmas party, where directors of Your Health Germany and No Virus Ltd decided to inform each other before altering product pricing, appears to contravene the principles of Article 101 TFEU. While the agreement was nothowcase that this was not a formal contract, EU case law, such as in *T-Mobile Netherlands BV v Raad van Bestuur* (2009), establishes that even informal understandings or concerted practices can constitute a breach if they reduce competition. Since mid-2025, the consistent pattern of similar price increases and reductions by both companies suggests coordination, which arguably has the effect of limiting price competition. This behavior aligns with characteristics of price-fixing, a practice deemed to have the object of restricting competition under EU law (Whish and Bailey, 2021).
Furthermore, given that Your Health Germany hosts an online platform (Your Health Online) facilitating sales across the EU, and considering the cross-border nature of No Virus Ltd’s operations, the conduct is likely to affect trade between Member States—a key criterion for Article 101 applicability. The cumulative market power of both entities amplifies the potential harm to consumers through inflated prices.
Potential Defenses and Exemptions
It is worth considering whether the companies’ actions could be justified under Article 101(3) TFEU, which allows exemptions for agreements that benefit consumers, promote technical progress, or improve distribution efficiency. However, there is no evidence to suggest that the price coordination has yielded such benefits. Typically, as noted by Jones and Sufrin (2016), price-related agreements rarely meet exemption criteria due to their direct impact on consumer welfare. Thus, it is unlikely that Michael or the companies could successfully invoke this defense.
Implications for Michael and Enforcement Risks
As a director of Your Health Inc, Michael must be advised that Your Health Germany’s involvement in this conduct exposes the company to significant legal risks. The European Commission, empowered to investigate and impose fines up to 10% of a company’s global turnover under Regulation 1/2003, could initiate proceedings if evidence of anti-competitive behavior is substantiated (European Union, 2003). Additionally, private enforcement through damages claims by affected parties, such as pharmacies using Your Health Online, is a possibility. Michael should ensure compliance with EU competition law by ceasing any coordination with competitors and seeking legal counsel to mitigate risks.
Conclusion
In summary, the informal agreement between Your Health Germany and No Virus Ltd to align pricing strategies likely breaches Article 101 TFEU due to its anti-competitive nature and effect on trade within the EU. The synchronized price adjustments since restate market share and the absence of justifiable benefits to consumers further indicate a restriction of competition by object or effect. Michael must recognize the serious legal and financial implications of such conduct, including potential fines and reputational damage. Immediate steps to ensure compliance with EU competition law are advisable to protect Your Health Inc and its subsidiaries from enforcement action. This case underscores the importance of robust antitrust policies in safeguarding market integrity within the EU.
References
- European Union. (2003) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty. Official Journal of the European Union.
- European Union. (2012) Consolidated Version of the Treaty on the Functioning of the European Union. Official Journal of the European Union.
- 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.
