Introduction
This essay examines whether the conduct of Your Health Germany and No Virus Ltd, following an informal agreement on pricing coordination during a Christmas party in December 2024, constitutes a breach of European Union (EU) competition law. The focus is on the apparent alignment of pricing strategies since mid-2025, as evidenced by parallel price increases and reductions. It will evaluate the behaviour under Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits anti-competitive agreements. The discussion will outline the legal framework, assess the nature of the agreement and its effects on competition, and provide advice to Michael regarding potential legal implications.
Legal Framework of EU Competition Law
EU competition law, primarily governed by Article 101 TFEU, prohibits agreements, decisions, and concerted practices that may affect trade between Member States and have as their object or effect the prevention, restriction, or distortion of competition within the internal market (Europa.eu, 2023). Such anti-competitive conduct includes price-fixing, market-sharing, and other collusive behaviours. The European Commission and national competition authorities rigorously enforce these rules to ensure fair competition, protect consumer welfare, and promote market efficiency. Importantly, an agreement need not be formal or written; even informal understandings or ‘gentlemen’s agreements’ can fall within the scope of Article 101 if they influence market behaviour (Whish and Bailey, 2021).
Analysis of the Informal Agreement
The informal agreement made during the Christmas party in December 2024, where directors of Your Health Germany and No Virus Ltd agreed to inform each other before altering product prices, raises significant concerns under Article 101 TFEU. Although described as informal, this arrangement arguably constitutes a concerted practice, as it demonstrates a mutual understanding to coordinate pricing strategies. The European Court of Justice (ECJ) has consistently held that any form of coordination that reduces uncertainty in the market, such as sharing pricing intentions, is likely to restrict competition (Case C-8/08, T-Mobile Netherlands BV and Others, 2009). Therefore, the agreement appears to have the object of restricting competition, even without explicit evidence of enforcement.
Evidence of Coordinated Pricing Behaviour
Since mid-2025, the consistent pattern of similar price increases and reductions between Your Health Germany and No Virus Ltd provides further indication of anti-competitive behaviour. While parallel pricing alone does not necessarily prove collusion, it can be considered evidence of a concerted practice when combined with prior communication or agreement, as seen here (Whish and Bailey, 2021). This alignment suggests that the companies may have acted on their informal understanding, reducing independent decision-making and, consequently, competition in the market. Such conduct could impact trade between Member States, especially given Your Health Germany’s cross-border operations, thereby fulfilling the jurisdictional requirement of Article 101 TFEU.
Potential Defences and Limitations
It should be noted that the companies might argue the agreement had no appreciable effect on competition or was not implemented. However, the ECJ has clarified that agreements with the object of restricting competition, like price coordination, do not require proof of actual effects to breach Article 101 (Case C-226/11, Expedia Inc., 2012). Furthermore, any efficiency gains or consumer benefits arising from such coordination would need to be substantial and demonstrable to qualify for an exemption under Article 101(3) TFEU, which seems unlikely in this context of apparent price alignment.
Conclusion
In conclusion, the informal agreement between Your Health Germany and No Virus Ltd to inform each other of pricing changes, coupled with subsequent parallel pricing behaviour since mid-2025, likely constitutes a breach of EU competition law under Article 101 TFEU. The arrangement appears to have the object of restricting competition by reducing market uncertainty, and the observed pricing patterns reinforce this conclusion. Michael should be advised that such conduct could attract scrutiny from the European Commission or national competition authorities, potentially leading to fines or other penalties. It would be prudent for the companies to cease any coordination immediately and seek legal counsel to mitigate risks. Indeed, fostering independent pricing strategies is essential to comply with EU law and avoid significant legal and financial consequences.
References
- Case C-8/08, T-Mobile Netherlands BV and Others v Raad van bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-04529.
- Case C-226/11, Expedia Inc. v Autorité de la concurrence and Others [2012] ECLI:EU:C:2012:795.
- Europa.eu (2023) Article 101 of the Treaty on the Functioning of the European Union. EUR-Lex.
- Whish, R. and Bailey, D. (2021) Competition Law. 10th edn. Oxford University Press.
