Am I obligated to match my prices with those of my competitors?
May 10, 2023 | 40,00 EUR | answered by Sandra Bittner
Dear Lawyer,
My name is Eiko Schmid and I run an online shop for electronics. Lately, I have noticed that some of my competitors are offering similar products at lower prices. Now I am wondering if I am obligated to adjust my prices to match those of my competitors in order to remain competitive.
I am concerned that I may be in violation of competition law if I do not adjust my prices. On the other hand, I also want to be able to set my own prices to maximize my own profit.
Can you please tell me if it is legally permissible to match my prices with those of my competitors? Are there ways in which I can adjust my prices without violating competition law? I want to ensure that I comply with all legal requirements while also operating successfully in the market.
Thank you in advance for your help and advice.
Sincerely,
Eiko Schmid
Dear Mr. Schmid,
Thank you for your inquiry regarding competition law and the question of whether you are obligated to align your prices with those of your competitors. It is understandable that as an online shop operator, you are seeking legal information to ensure that you are behaving correctly while remaining competitive.
In Germany, it is not prohibited to set prices freely. This means that as a business owner, you generally have the freedom to determine your prices at your own discretion. There is no legal obligation to adjust the prices of your products to those of your competitors. You have the right to set your own prices to maximize your profit.
However, there are some aspects of competition law that you should consider in order to not violate existing laws. For example, it is prohibited under competition law to engage in unlawful price-fixing agreements with your competitors. This means that you are not allowed to collude with other companies to artificially raise prices or hinder competition.
You should also be aware of the prohibition of so-called "price dumping." Price dumping occurs when a company offers its products at such a low price that it unfairly influences competition. It is important that you do not reduce your prices so significantly that it distorts competition.
To adjust your prices without violating competition law, I recommend conducting a market analysis and strategically setting your prices. You should align with market prices, but also consider your own costs and profit goals. This way, you can remain competitive without violating legal requirements.
I hope that this information has been helpful to you. If you have any further questions or require individual advice, I am at your disposal.
Sincerely,
Sandra Bittner, Competition Law Attorney
