Court of Justice rules on excessive pricing test

The Court of Justice has ruled on a reference from the Latvian Supreme Court concerning the application of Article 102 TFEU to excessive pricing by collecting societies. The Court ruled that comparing prices in different Member States can be an appropriate way of determining whether prices are excessive.

The case concerns the Latvian collecting society AKKA/LAA which was fined by the Latvian Competition Council for charging excessively high rates for authors’ remuneration.

The Court found that trade between Member States was capable of being affected by the rates set by a collecting society that holds monopoly rights and manages the rights of non-national copyright owners such that Article 101/102 may apply.

On the question of excessive/unfair pricing the Court said that it was appropriate to compare rates with those in neighbouring Member States, provided that these are selected in line with objective and verifiable criteria and comparisons are made consistently. 

There is no minimum threshold above which a rate might be deemed “appreciably higher” but this in an indication of abuse which the dominant company has the burden of justifying the differential.  The Court’s recognition that ability to pay is a relevant factor suggests that in some markets country comparisons might not be appropriate.

The judgment is in line with the United Brands test where the Court considered that charging a price that was excessive because it had no reasonable relationship to the economic value of the product supplied would be an abuse.  It follows the opinion of Advocate General Wahl, although it does not go as far as Wahl who said that the authorities must be “almost sure” that there can be no other rational economic explanation for higher prices before finding an abuse.

Case C-177/16 Biedrība ‘Autortiesību un komunicēšanās konsultāciju aģentūra – Latvijas Autoru apvienība’ v Konkurences padome, ECLI:EU:C:2017:286