In the case of dominant undertakings, the Chapter II prohibition may be breached if, for example, the undertaking embarks on a pricing strategy where it deliberately incurs losses in order to eliminate a competitor so as to be able to charge excessive prices in the future. This is sometimes termed predatory pricing . In determining whether or the undertaking's strategy breaches the Chapter II prohibition, the Office will look very closely at its costs. Its intentions may also be relevant. I have heard that a shop opening nearby will be selling the same goods as me.
Discounts are a form of price competition and are generally to be encouraged.
They often reflect the lower costs of supplying certain customers or groups of customers. There is a covenant in my lease, which prevents me from selling certain goods. Agreements relating to land , such as leases, do not normally give rise to competition concerns. As a result, certain land agreements are excluded from the scope of the Chapter I prohibition. Where the exclusion applies, it covers restrictions in leases as to what can or cannot be sold from the premises, but does not extend to the terms on which the goods are sold.