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08 Sep 2015

Anti-competitive Agreements - Competition regulators attack pricing clauses in distribution agreements

Most favoured nation ('MFN') clauses, sometimes known as 'price parity' or 'best price' clauses, are agreements whereby one party promises another to always offer its best rates or terms for a product or service. They are commonly found in a wide range of commercial agreements from long term industrial supply to distribution arrangements. However, increasingly they have been adopted in the on-line world through agreements for online travel agency sites, price comparison sites and online marketplaces where the site operators wish to ensure that they can offer the lowest price on the market.\r
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Whilst on the face of it these clauses seem favourable to consumers, regulators are beginning to take the opposite view. We look at the position of these clauses in the EU and the U.S. below.


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