Competition Policy in Modern Retail Markets

With e-commerce having accelerated over recent years, retailing has changed significantly. Manufacturers and retailers have established multichannel (offline/online) strategies within which pricing restraints often constitute a central element. Behind these strategies sits the firms' ambition to find a solution to free-riding. Free-riding results in non-optimal service levels and price setting and thus offers a business justification for pricing restrains which, in many instances, are viewed as infringements under Article 101 or 102 Treaty on the Functioning of the European Union (TFEU). In this article we map out the alignment of characteristics of products targeted by recent antitrust enforcement in Europe with the likelihood of free-rider effects taking place. Specifically in the case of products with search and experience characteristics, we find intensive enforcement activity despite prevalent free-rider effects