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Academic Articles Awards > Dominance

Most Favoured Nation Clauses Revisited

Ingrid Vandenborre and Michael J. Frese, E.C.L.R., Issue 12, p. 588, 2014

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Antitrust enforcement in the European Union has recently focused on Most Favoured Nation (MFN) clauses. Also outside of Europe, there is an increasing interest in the competitive relevance of these clauses, including most recently in China. The recent investigations by competition authorities throughout the European Union have already resulted in a number of prohibition or commitment decisions, with several investigations still under way. However, the competition law assessment of MFN clauses is only gradually taking shape. Unlike most developments in EU competition policy, developments in the area of MFN clauses are at this stage still very much driven by the enforcement actions taken by Member State competition authorities.1 In addition, the assessment of the competitive impact of an MFN clause is highly fact-­specific and dependent on the market position of the parties, the characteristics of the market, and the manner in which the MFN clause is implemented. This article revisits the function and effects of MFN clauses and attempts to define the circumstances under which competition law scrutiny is warranted.

We will start off by describing the origins, definition and applications of MFN clauses. Section 3 then provides an overview of potential competitive effects. Case precedents are discussed in section 4. Section 5 draws on the earlier sections and provides suggestions on how to deal with MFN clauses under the current EU legal framework.

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