PARITY CLAUSES AND THE EUROPEAN COMPETITION LAW IN TOURISM 525 Article 102 TFEU16 prohibits, as incompatible with the internal market, an abuse of a dominant position “in so far as it may affect trade between Member States”, while Article 54 of the EEA Agreement contains a similar provision. Article 102 TFEU and Article 54 of the EEA Agreement17 prohibit dominant undertakings from strengthening their positions, by using methods other than those which come within the scope of competition on the merits. However, the list of abusive practices in these articles are merely examples and not an exhaustive enumeration of the practices they prohibit18. MFNs and similar vertical restraints are typically found in contractual relationships between suppliers and powerful intermediaries in the chain of distribution of a product or service19. Moreover, MFN agreements allow the parties to reduce their negotiating costs and can also affect innovation in the market. Even if it is determined that the MFN harmed prices and market concentration (fewer firms charging higher prices), it is still possible that the presence of an MFN increased the rate of innovation. The impact of the MFN on entry and exit decisions may be evaluated by analysing the concentration in the market. The competitive effect of an MFN is determined by evaluating the ensuing efficiencies and other benefits against any negative price and non-price consequences of the MFN, by evaluating price levels, price dispersion, entry and exit and product offerings, over time. The contractual relationship between OTAs and hotels is regulated in different ways across the EU, sometimes based on competition law, sometimes based on consumer law and sometimes with sector-specific regulation (Monti, 2018). The actual economic welfare effects of OTA-hotel price parity clauses are uncertain, but the divergence in the regulatory framework is also explained by protectionist efforts designed to protect smaller hotels. It is premature to legislate at EU level given the current uncertainty about the economic effects of price parity clauses20. 16 OJ L 1, 4.1.2003, p.1. With effect from 1 December 2009, Articles 81-82 of the EC Treaty have become Articles 101-102, respectively, of the Treaty on the Functioning of the European Union (TFEU). The two sets of provisions are, in substance, identical. For the purposes of this Decision, references to Articles 101102 of the TFEU should be understood as references to Articles 81-82, respectively, of the EC Treaty where appropriate. The TFEU also introduced certain changes in terminology, such as the replacement of “Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will be used throughout this Decision. 17 Source: http://ec.europa.eu/competition/international/multilateral/eea_agreemt_comp.pdf. 18 Source: Judgment of 21 February 1973, Europemballage and Continental Can v Commission, C-6/72, ECLI:EU:C:1973:22, paragraph 26. 19 Source: https://dre.pt/pesquisa/-/search/553391/details/normal?q=Lei+n.%C2%BA%2019%2F2012. 20 For a critical assessment, see Monti “The Proposed Directive to Empower National Competition Authorities: Too much, too little or just right?” (2017) 3(3) Competition Law and Policy Debate 40.
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