Dynamic Pricing - Pricing Legislation

Constraints to Dynamic Pricing - Legislation

UK

In March 2001 the UK passed the Competition Act that gave the Office of Fair Trading powers to fine companies acting in an anti-competitive manner. For example, companies are forbidden to collude with each other or to set predatory prices. The OFT can fine companies up to 10% of the annual turnover. The legislation has exclusions for small companies. The first company was pharmaceutical company for supplying cheap morphine to hospitals. Within 5 months a second company, Aberdeen Journals, was fined £1.3m (see box).

OFT Fines Aberdeen Journals £1.3m for Predatory Pricing

Aberdeen Journals is owned by the Northcliffe Newspapers who are part of Daily Mail & General Trust. Aberdeen Journals was found guilt of trying to push out of the market their rival Aberdeen and District Independent by pricing advertising own its own Herald and Post newspaper at below cost.

Aberdeen Journals could have been fined as much as £3.4m, 10% of its turnover but in the event were fined 'just' £1.3m. The OFT said there were mitigating circumstances, that would be disclosed shortly.
The Independent, 17 July 2001

Europe

USA

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External Resources

Hughes, Chris, OFT Fines Aberdeen Journals £1.3m for Predatory Pricing, The Independent, 17 July 2001
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