Can international competitors discuss pricing strategies?

Question

Coming up soon is the annual World Low Cost Airlines Congress,

drawing in low cost carriers from around the world year on year. Sessions will discuss business models, pricing strategies, revenue streams and more.

I have observed some meetings that bring competitors together to discuss business, and found they usually include an antitrust warning at their beginning reminding people to not discuss these kinds of topics, especially anything around pricing or market division (which for airlines might be around who's going for what routes), including at sidebars, networking breaks, and social events.

The upcoming meeting is in London, but includes a variety of companies from around the world (taking the event website at face value).

Are there any laws (especially those related to antitrust) which prevent international competitors from coming together to discuss pricing strategies etc.?

Answer 1

In many countries, national anti-trust or competition law makes agreements between competitors, including international competitors, on pricing or other agreements considered to be anti-competitive, such as agreements to allocate market areas, illegal. The exact scope and provisions vary by country. Generally a company is bound by the law of its home country. It may well also be bound by the laws of any other countries where it does business.

The advice my employer gives its employees is not to discuss pricing in any way with any competitor, except in the context of a deal approved by in-house counsel as not violating any such laws.

I suppose "pricing strategies" might not include the kind of specific pricing information which would lead to an unlawful agreement. that would depend on exactly what was discussed, but it sounds like a risky practice to me.

Strictly speaking it is not the discussions that are unlawful, but anti-competitive agreements. But discussions plus co-ordinated actions can be used as evidence to prove such unlawful agreements.

Penalties for violating such laws can be significant, including large fines for the companies, and criminal charges for individuals. Caution would seem a very good idea to me.

Answer 2

The main anti-cartel legislation present in the UK is taken from article 101 TFEU.

Essentially, companies are forbidden to enter "undertakings" or a "concerted practice" which would have the effect of disrupting competition in the internal market, this includes:

The issue for many companies here is that the words undertaking and concerted practice have a very broad definition. Undertakings don't have to be contractual agreements, and don't have to be direct, they can be indirect.

Concerted practices are situations where companies "follow the hint" of eachother. An example from my old EU Law Lecturer was a case where one gas station "randomly" raised its prices, and, even though there was no direct communication, other gas stations in the area began to raise their prices too. They all fixed the price higher by following each other.

As you can see, this means where there are meetings between competitors or companies that operate in the same industry, representatives have to be very careful not to raise the suspicion that there is an indirect or direct agreement being made.