- ASCOLA Competition Law series
Edited by Daniel Zimmer
Chapter 16: The Single Market Imperative and Consumer Welfare: Irreconcilable Goals? Exploring the Tensions Amongst the Objectives of European Competition Law through the Lens of Parallel Trade in Pharmaceuticals
16. The single market imperative and consumer welfare: irreconcilable goals? Exploring the tensions amongst the objectives of European competition law through the lens of parallel trade in pharmaceuticals Matteo Negrinotti* 1 INTRODUCTION: PARALLEL TRADE BETWEEN FREE MOVEMENT AND COMPETITION RULES Parallel trade (or grey markets) refers to the act of importing a product into one country (the import country) from another (the export country), and placing it on the market outside the distribution channels authorized by the product’s manufacturer.1 Parallel trade is more likely to occur when products are priced differently across markets. This creates opportunities for arbitrageurs to make profits by purchasing a product in a low price country (the export country) in order to export it for resale in a high price country (the import country). If transactions costs * Assistant Professor of Law, Tilburg University and Senior Member of TILEC. The author is grateful to the participants of the 5th ASCOLA Conference in Bonn on 6–7 May 2010 for their comments and input. All inaccuracies however are the sole responsibility of the author. 1 Another definition, which more heavily stresses the link with intellectual property rights, can be found in OECD-Joint Group on Trade and Competition, Synthesis Report on Parallel Imports (COM/DAFFE/COMP/TD(2002)18/FINAL 28 Jun 2002). According to the report, parallel imports are defined as ‘genuine goods sold in the country of export with the permission of the rights holder, but imported by a reseller without the authority of the rights holder in the country of...
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