Tacit collusion to fight predatory pricing
I have thoroughly enjoyed teaching for the first time in the Executive LLM programme recently launched by the LSE. As is usually the case, one learns a lot from students. When discussing oligopolies and tacit collusion, Lars mentioned the creation of a Market Transparency Unit for Fuels (all capital letters, it’s after all a German authority) by the Bundeskartellamt. According to the authority, this initiative will make it easier to address ‘illegal predatory strategies and other forms of market power abuse’. Impeccable move. There is certainly nothing better than tacit collusion to fight predatory pricing!
Chillin'Competition 
Indeed, we have similar problems in the Netherlands, with a highly transparent and very concentrated petrol market along the motorways. In the German case I thought that the prices as such would not be accessible to the petrol stations but rather be made available to developers of navigation software etc? In the Netherlands the legislator has decided that it is a good idea to reduce the market concentration by auctioning the right to operate petrol stations every 15 years. It is fascinating to see how the incumbent four companies continuously win these auctions (often outbidding the second bidder by 50 – 100%) and thus erect formidable barriers to entry on what is a tight oligopoly. Here’s a Dutch website displaying the auction results. http://www.rvob.nl/nieuws/nieuwsberichten_rvob/benzinestations_verhuurd
So if this increases market transparency, do we now get a collective dominance imposing unfairly high prices contrary to Art. 102 TFEU and does that mean that the BKartA infringes the duty of loyalty (Art. 4(3) TEU) resting upon it?
Hans
14 April 2014 at 11:55 am