The present Master's thesis examines in depth the subject of vertical price fixing. Initially, the thesis provides an overview of the main categories of EU competition law, outlining the current rules on vertical price fixing, and subsequently analysing, from a comparative legal perspective, the main differences between the antitrust regimes in the EU and the United States.
This is followed by a discussion of the various economic effects associated with this controversial practice. The core of the challenges concerning vertical price fixing lies in the fact that, from an economic point of view, it falls somewhere between the two extremes. In many cases it can undoubtedly be anticompetitive. However, it may also give rise to significant efficiency benefits, and in certain cases it is likely to be indispensable for the attainment of such benefits.
The plurality of views in economic theory is reflected in the diversity of regulatory approaches towards vertical price fixing. A comparative legal review of the regimes in the European Union and the United States identifies three different regulatory approaches, namely (i) per se prohibition, (ii) rule of reason and (iii) rebuttable presumption of illegality. The thesis goes on to discuss these approaches and the circumstances in which vertical price fixing is a permissible restriction of competition under the respective approaches. In this context, the landmark decision of the US Supreme Court in Leegin and its significance in the context of the evolution from the per se prohibition to the rule of reason is also discussed.
Finally, the thesis addresses the question of whether a reform of the European Union’s legislative approach towards vertical price fixing is needed, following the example of the developments in the United States. In order to tackle this question, the Master's thesis applies the findings of economic analysis of law to evaluate each of the three approaches and seeks to identify the optimal regulatory approach to vertical price fixing.
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