Legal treatment in the European Union of price parity clauses used by digital platforms

Abstract

Price parity clauses have frequently been included by digital platforms in the agency agreement binding them with the businesses using their intermediation services to sell their products. Whereas the narrow price parity clause prevents sellers from offering their products at a lower price on their direct online sale channels, the wide parity clause prohibits them to sell a cheaper price on any sale channels at all. Several national competition authorities throughout the EU considered these clauses to be anticompetitive and therefore unlawful under the terms of articles 101 of the TFEU. Nevertheless, as the Booking.com case reveals, many divergences appeared among member states. Some prohibited both wide and narrow price parity clauses, others decided to allow narrow parity clauses or did not take a stand. The situation eventually led to a regulatory fragmentation and legal uncertainty on the issue in the EU. To achieve coherence within the single market, in 2022 the European Commission adopted a new version of the VBER and the Digital Markets Act. Both regulations give the clarity the digital economy and its gatekeepers require in order to keep on growing, in accordance with the welfare of the European market and its consumers.