Volume 38 (2015)

Volume 38 (2015) / Issue 3

Ingrid Vandenborre, Michael J. Frese, 'The Role of Market Transparency in Assessing MFN Clauses' (2015) 38 World Competition, Issue 3, pp. 333–348

Abstract

Recent years have shown increased antitrust attention to most favoured nation clauses. However, it is widely recognized that MFN clauses may have both pro- and anticompetitive effects. This article argues that MFN clauses should be assessed under a ‘by effect’ standard and that market transparency should play a role in this assessment. Market transparency not only determines the likelihood that an MFN clause is actually applied, it also determines the competitive conditions in the absence of the MFN clause. Both of these aspects play a crucial role in assessing the anticompetitive effects of MFN clauses, and precede the question whether potential procompetitive effects may offset potential anticompetitive effects. The importance of market transparency is illustrated with several case precedents, both within the area of MFN clauses and outside. It is also borne out by the fact that all the recent investigations are concentrated in the online sector, where markets are typically very transparent. Nevertheless, even in the online sector, market transparency is only the starting point of the analysis and does not prejudge the competitive implications of MFN clauses.

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ISSN: 1011-4548
ID: WOCO2015029