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A MOST-FAVOURED-CUSTOMER CLAUSE WITH A TWIST

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Abstract:

The article firstly explains the various potential effects of Most-Favoured-Customer (MFC) clauses on customers including the tension between fair and low prices. It then goes on to demonstrate that the clause identified in the Monopolies and Mergers Commission Report on Foreign Package Holidays as an MFC clause, does not fit the conventional definition. An effects-based assessment of this clause shows that it is closer in nature to a price matching guarantee, sharing several of its anti-competitive effects. Moreover, the analysis enables us to demonstrate that the latest Foreign Package Holidays Order based on a Court of Appeal decision does not provide the necessary prohibition of MFC clauses to guard against consumer detriment.

Keywords: Most-favoured-customer clauses; anti-competitive contract clauses; fairness; price guarantees

Document Type: Research Article

Publication date: April 1, 2006

More about this publication?
  • This scholarly, peer-reviewed publication of original articles and analysis of current developments in competition law is designed to complement and augment the existing literature with a special focus on European developments. Topics include:
    • Vertical and Conglomerate Mergers
    • Enlargement of the Union - the ramifications for Competition Policy
    • Unilateral and Coordinated Effects in Merger Control
    • Modernisation of European Competition law
    • Cartels and Leniency
    • Article 82- restatement or evolution?
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