Can a company set its prices freely?
March 15, 2024 | 70,00 EUR | answered by David Rüppel
Dear lawyer,
My name is Fanni Maier and I am the owner of a small company in the textile industry. Lately, I have noticed that my competitors are offering similar products at significantly lower prices than me. Now I am wondering if as a company I can freely set my prices or if there are legal requirements that restrict my pricing.
I am concerned that I may lose customers if I am unable to adjust my prices to match those of my competitors. At the same time, I also want to avoid getting into legal trouble by either lowering my prices too much or setting them too high.
What are the legal framework for setting prices as a company in the field of commercial law? Are there regulations that restrict my pricing or prevent me from setting my prices at my own discretion? Are there possible solutions to make my prices competitive while remaining compliant with the applicable laws?
I would appreciate your assessment and any recommendations on this matter.
Sincerely,
Fanni Maier
Dear Mrs. Maier,
Thank you for your inquiry regarding pricing as a company in the field of business law. As a lawyer specializing in business law, I understand your concerns and questions and will do my best to provide you with a detailed response.
In Germany, companies are generally free to set their prices as they see fit. There are no legal requirements that prevent companies from setting their prices at their own discretion. This means that you generally have the opportunity to set your prices independently of your competitors.
However, there are some exceptions and limitations that must be considered. For example, there are regulations in competition law that prevent companies from colluding on prices or making cartel-relevant price agreements. Therefore, it is important that you do not set your prices in agreement with other companies in order to avoid antitrust violations.
Furthermore, it is important to consider transparency and fairness towards your customers in your pricing. For example, it is not allowed to provide misleading prices or deceive customers about the actual price. You must also ensure that your price information complies with legal requirements and includes all necessary information.
To offer competitive prices without violating the applicable laws, I recommend conducting a market analysis to compare prices with your competitors and adjust your prices accordingly. You may also consider what other added value you can offer to your customers to differentiate yourself from the competition.
Finally, I recommend consulting a lawyer specializing in business law in case of doubt, to ensure that your pricing is in compliance with the applicable laws. I hope that my information is helpful to you and I am available for any further questions you may have.
Sincerely,
David Rüppel
