Can I set the prices of my products freely, or are there legal restrictions?
September 19, 2023 | 30,00 EUR | answered by Greta Kleine
Dear lawyer,
My name is Siegfried Voigt and I run a small business that sells handcrafted furniture. Lately, I have noticed that some of my competitors are setting their prices very low, leading to intense competition. Now, I am wondering if I am allowed to freely set my prices or if there are legal restrictions that prevent me from doing so.
Currently, I am in a position where I would like to adjust my prices to cover my costs and make a reasonable profit. However, I am concerned that I may violate competition law if I set my prices too high or too low. I want to ensure that I comply with all legal requirements and avoid legal issues.
Therefore, my question to you is: Am I allowed to freely set the prices of my products or are there legal restrictions that I need to consider? Are there guidelines or recommendations that can help me set my prices in a legally compliant manner? I would greatly appreciate your professional assessment and any possible solutions you can offer.
Thank you in advance for your support.
Sincerely,
Siegfried Voigt
Dear Mr. Voigt,
Thank you for your inquiry regarding setting your prices as an entrepreneur selling handmade furniture. It is understandable that you are concerned about whether there are any legal restrictions that could affect your pricing. In the field of competition law, there are indeed regulations that you should consider when setting your prices.
In Germany, the so-called antitrust law applies, which is intended to protect and ensure competition between companies. Antitrust law prohibits agreements between companies that aim to restrict competition. It is prohibited to both collude on prices and engage in predatory pricing. Predatory pricing occurs when companies deliberately lower their prices below production costs to drive competitors out of the market.
Therefore, it is important that you do not set your prices in agreement with your competitors and ensure that your prices do not significantly undercut your production costs. Otherwise, you could be in violation of antitrust law and risk legal consequences.
However, it is generally allowed for a company to freely set its prices as long as it complies with competition law. As an entrepreneur, you have the right to adjust your prices to cover your costs and achieve a reasonable profit.
To ensure that you are acting in a legally compliant manner, I recommend making your prices transparent and understandable. Adhere to legal requirements and avoid colluding with your competitors. You can also consider industry standard prices and ensure that your prices are market-appropriate.
If you are still unsure, I recommend seeking advice from a specialized attorney in competition law. They can provide you with individual recommendations and solutions to ensure that you are operating within the law.
I hope that this information has been helpful to you. If you have any further questions, please do not hesitate to contact me.
Sincerely,
Greta Kleine
Attorney specializing in competition law
