Trade and Competition Law in the EU and Beyond
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Trade and Competition Law in the EU and Beyond

Edited by Inge Govaere, Reinhard Quick and Marco Bronckers

This well-documented book comprises a stellar cast of European and American authors delivering an overview of cutting edge issues in the areas of trade and competition law, arising in the EU and beyond.
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Chapter 20: Parallel Trade: Econ-oclast Thoughts on a Dogma of EU Competition Law

Nicolas Petit


Nicolas Petit 20.1 INTRODUCTION With an unparalleled ability to explain complex legal issues in a catchy and creative manner, Professor Jacques Bourgeois has set a high standard for legal scholars. This short chapter modestly attempts to pay tribute to his academic brilliance, in shedding new light on the European Union (EU) competition law principle that firms’ attempts to block parallel trade from ‘low price countries’ to ‘high price countries’ in the EU are akin to ‘hardcore’ restrictions of competition infringing Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). The choice of a topic that lies at the intersection of competition and trade policies will not come as a surprise to readers familiar with Professor Bourgeois’ work. And since Professor Bourgeois is a man of many languages, this study uses the words of economics to review this remarkably stable issue, at least in the case-law of the European courts. In the past decades, the European Court of Justice (ECJ) has repeatedly upheld European Commission (the Commission) decisions against firms that had sought to limit parallel trade within the EU. This is because parallel trade is deemed to improve consumer welfare, through downward price equalization. The leading cases involve sectors where goods/services are subject to price differentials across countries and/or intellectual property rights (IPRs), such as pharmaceuticals, cars, luxury goods and branded products, etc. In GlaxoSmithKline, for instance, the ECJ held that an agreement intended to limit parallel trade must in principle be considered to...

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