Competition Law and Competition Implications of Benchmarking Monopolies

1. Introduction

“Benchmarking monopolies” is not a formally recognised standalone category of competition-law infringement. The expression can, however, describe situations in which a monopolist or dominant undertaking uses benchmark prices, costs, performance indicators, competitor data, industry averages, algorithms, or internal comparisons to determine its commercial conduct.

Benchmarking can have two very different competition-law dimensions:

1. Benchmarking by a dominant/monopoly undertaking — e.g., comparing its prices with competitors or with prices in other geographic markets to determine whether its prices are excessive, discriminatory or otherwise abusive.
2. Benchmarking among competitors — where competing firms exchange commercially sensitive information through benchmarking exercises, industry databases, trade associations or pricing platforms, potentially facilitating coordination or cartelisation.

Competition law therefore does not prohibit benchmarking as such. The legal question is whether the benchmarking mechanism or its use creates, maintains, exploits or facilitates market power or coordination.

The EU excessive-pricing jurisprudence expressly recognises the use of benchmark prices to determine whether a dominant undertaking's price is excessive. At the same time, modern antitrust authorities recognise that information-sharing and analytical systems can increase market observability and make coordination easier.

2. Meaning of Benchmarking Monopolies

Benchmarking generally means measuring a firm's:

• price;
• cost;
• profit margin;
• quality;
• output;
• productivity;
• service levels;
• customer terms;
• innovation;
• market share; or
• other commercial indicators

against a reference point or benchmark.

In a monopoly or highly concentrated market, benchmarking may involve:

A. Internal benchmarking

The dominant firm compares:

Present price → historical price → historical cost → internal profitability.

B. Competitor benchmarking

The firm compares:

Its price → competitors' prices → industry average.

C. Geographic benchmarking

The firm compares:

Price in Market A → price for the same service in Market B.

D. Cost benchmarking

The firm compares:

Actual cost → efficient competitor's cost → hypothetical competitive cost.

E. Algorithmic benchmarking

Software continuously collects market data and determines:

• optimal prices;
• competitor responses;
• output;
• discounts;
• customer allocation;
• margins.

F. Benchmark-information exchanges

Several competitors provide information to a common benchmarking organisation, which produces an industry benchmark.

This last category presents significant cartel risks because the benchmark can become a mechanism for communicating competitively sensitive information.

3. Core Competition-Law Issues

3.1 Benchmarking and Excessive Pricing

The most obvious connection with monopoly power is excessive pricing.

Under Article 102(a) TFEU, a dominant undertaking may infringe competition law by imposing unfair purchase or selling prices.

The classic approach is:

Actual price → benchmark competitive price → significant difference → assessment of unfairness.

The benchmark may be based on:

• cost;
• previous prices;
• prices for comparable products;
• prices in another geographic market;
• competitors' prices;
• prices in another Member State;
• hypothetical competitive pricing.

The Court's jurisprudence recognises several possible benchmarking methodologies.

Thus, benchmarking can actually operate as an instrument for detecting monopoly exploitation.

4. Benchmarking as a Source of Market Power

Benchmarking becomes problematic where the benchmark itself is controlled by a dominant undertaking.

For example:

Dominant digital platform → collects market data → establishes industry benchmark → smaller firms must conform to benchmark → benchmark becomes de facto commercial standard.

This may create:

• price leadership;
• reduced price competition;
• entry barriers;
• information asymmetry;
• dependence on the dominant platform;
• strategic disadvantage for smaller competitors.

A benchmark can therefore evolve from a measurement tool into a market-governance mechanism.

5. Benchmarking and Information Exchange

Competitor benchmarking is particularly sensitive under competition law.

Suppose ten competing manufacturers submit:

• current prices;
• discounts;
• costs;
• production volumes;
• customer-specific information

to a benchmarking platform.

The platform then publishes:

“Industry benchmark price = ₹100.”

Each participant now knows that its competitors' prices cluster around ₹100.

The benchmark may therefore make the market more transparent and potentially facilitate coordination.

The U.S. Department of Justice specifically recognises that information exchanges can increase market observability and that pricing algorithms and analytical tools can facilitate monitoring of competitors.

6. Benchmarking Does Not Automatically Violate Competition Law

An important principle is that benchmarking is not inherently unlawful.

Benchmarking can generate legitimate efficiencies by allowing firms to:

• identify inefficient processes;
• improve quality;
• reduce costs;
• improve productivity;
• compare safety performance;
• identify technological improvements;
• develop better products.

U.S. Supreme Court jurisprudence has recognised that some exchanges of information may enhance rather than restrict competition. The modern treatment generally depends upon the nature of the information, market structure, purpose, frequency, aggregation and competitive effects.

Consequently, competition authorities must distinguish:

Efficiency-enhancing benchmarking

from

coordination-facilitating benchmarking.

7. Major Competition-Law Risks

7.1 Price coordination

If competitors use benchmarking to establish a common price reference, the benchmark can become a focal point for coordination.

7.2 Output coordination

Production information can allow competitors to determine whether rivals are reducing or increasing output.

7.3 Customer allocation

Customer-specific benchmarking can reveal which competitors serve particular customers.

7.4 Margin coordination

Competitors may use benchmark margins to avoid competing aggressively.

7.5 Tacit coordination

Even without an express agreement, frequent publication of commercially sensitive data can make coordinated market behaviour easier.

7.6 Algorithmic coordination

An algorithm may continuously observe competitors and automatically adjust prices towards a benchmark.

7.7 Entry barriers

A dominant benchmark provider may establish standards that new entrants cannot economically match.

7.8 Discriminatory benchmarking

A monopolist might benchmark different customers or geographic markets in a way that produces discriminatory pricing.

8. Important Case Laws

1. United Brands Company v Commission

Case 27/76, Court of Justice of the European Union, 1978

This is the foundational EU case on excessive pricing by a dominant undertaking.

The Court considered whether United Brands had imposed unfair prices for bananas. The case established the famous excessive-pricing methodology involving consideration of the relationship between the price charged and the economic value of the product.

Importance for benchmarking

The case establishes the conceptual foundation for asking:

What would be a reasonable competitive price?

That question necessarily requires some form of benchmark.

The case therefore provides the starting point for analysing monopoly pricing against competitive reference points.

Principle

A dominant firm's price may be problematic where it bears no reasonable relationship to the economic value of the product.

2. AKKA/LAA v Konkurences padome

Case C-177/16, Court of Justice of the European Union, 2017

This is one of the most important cases specifically concerning comparative benchmarking.

The case concerned fees charged by a Latvian copyright-management organisation possessing a monopoly position.

The Court considered comparison of prices charged:

• in different Member States;
• in neighbouring countries; and
• in other relevant markets.

The Court accepted that geographical price comparisons can be used to determine whether prices are unfair, provided the comparison is undertaken appropriately.

Benchmarking principle

A geographical benchmark can be legitimate where:

• the reference markets are appropriately selected;
• the markets are sufficiently comparable;
• objective criteria are used;
• the comparison is consistent.

Competition significance

This case demonstrates that benchmarking is not merely an economic technique. It can become a legal evidentiary methodology for proving abuse of dominance.

3. SABAM v Weareone.World and Wecandance

Case C-372/19, Court of Justice of the European Union, 2020

The case concerned the Belgian copyright-collecting society SABAM and pricing for musical works performed at festivals.

SABAM had a de facto monopoly and charged fees based partly on gross ticket revenue.

The Court considered whether the pricing structure could constitute an unfair price under Article 102 TFEU.

Relevance to benchmarking

The case demonstrates that the assessment of monopoly pricing can require consideration of:

• the service actually provided;
• the value of that service;
• the repertoire actually used;
• the relationship between remuneration and economic value.

Competition significance

A benchmark should not mechanically compare headline prices. It must account for differences in the underlying service and value.

This is particularly important for:

• digital platforms;
• intellectual-property licensing;
• cloud services;
• telecommunications;
• financial infrastructure;
• software ecosystems.

4. United States v. United States Gypsum Co.

438 U.S. 422 (1978)

This U.S. Supreme Court case is important for the competition-law treatment of information exchanges.

The Court examined information concerning prices and competitive conduct in the gypsum industry.

The broader principle is that exchanges of information among competitors are not automatically unlawful; their competitive significance depends upon the circumstances.

The modern antitrust understanding recognises that information exchanges can sometimes be efficiency-enhancing but can also facilitate coordination.

Benchmarking relevance

A benchmarking system involving competitors must therefore be examined for:

• the type of information exchanged;
• whether it is current or historical;
• whether it is aggregated;
• whether it identifies individual competitors;
• frequency of exchange;
• market concentration;
• likelihood of coordination.

5. American Column & Lumber Co. v United States

257 U.S. 377 (1921)

This early U.S. Supreme Court case is a classic authority concerning exchange of commercially sensitive information among competitors.

The Court examined an industry system through which participating businesses exchanged detailed information relating to prices, sales and business conditions.

Benchmarking relevance

The case illustrates the danger of creating a system in which competitors can effectively monitor one another.

A benchmarking programme becomes more problematic when it provides:

current + detailed + competitor-specific + commercially sensitive information.

Modern significance

Although the technological environment is completely different today, the underlying competition concern remains relevant to:

• industry benchmarking platforms;
• data pools;
• pricing databases;
• AI pricing systems;
• trade-association databases.

6. U.S. v. Agri Stats, Inc.

The Agri Stats litigation provides a particularly contemporary illustration of the risks of information-sharing systems.

The U.S. Department of Justice alleged that Agri Stats facilitated exchanges of competitively sensitive information concerning prices, output and costs among major meat processors. In May 2026, the DOJ announced a proposed settlement designed to end the information-sharing practices at issue.

Benchmarking relevance

This case is highly significant for modern benchmarking because an independent information intermediary can itself become a mechanism through which competitors obtain commercially sensitive information.

The risk does not necessarily disappear merely because:

Competitor A → information intermediary → Competitor B

rather than:

Competitor A → Competitor B.

Lesson

A benchmarking provider should avoid becoming a central nervous system for competitor coordination.

7. European Commission — Ethanol Benchmarks Cartel

The European Commission's ethanol benchmark investigation provides a direct example of competition-law concerns surrounding industry benchmarks.

The Commission identified an ethanol benchmark cartel and in December 2023 fined Lantmännen €47.7 million. The Commission's published cartel case materials identify the matter under the heading “Ethanol benchmarks.”

Significance

This demonstrates that the word “benchmark” does not immunise commercial conduct from cartel scrutiny.

A benchmark can become problematic where competing undertakings manipulate or coordinate information used to establish an industry reference price.

Legal lesson

Competition authorities may investigate:

• manipulation of benchmark-setting;
• coordination of submissions;
• exchange of sensitive information;
• artificial influence over reference prices;
• communications surrounding benchmark methodology.

9. Comparative Case-Law Table

10. Benchmarking Monopolies and Article 102 TFEU

For an EU dominant undertaking, several Article 102 theories can potentially arise.

A. Excessive pricing

Benchmark:

Actual price vs competitive/economic-value benchmark.

B. Predatory pricing

Benchmark:

Price vs relevant cost measure.

The EU's modern economic analysis uses cost benchmarks such as average avoidable cost and long-run average incremental cost in appropriate contexts.

C. Margin squeeze

Benchmark:

Dominant firm's downstream price − reasonably efficient competitor's cost.

D. Discriminatory pricing

Benchmark:

Prices charged to comparable customers.

E. Exclusionary conduct

Benchmark:

Dominant firm's conduct vs conditions necessary for an equally efficient competitor to compete.

Thus, benchmarking can appear throughout the abuse-of-dominance framework.

11. Benchmarking and Indian Competition Law

Under the Competition Act 2002, benchmarking can become relevant primarily through:

Section 3

Where benchmarking facilitates an agreement or concerted practice having an appreciable adverse effect on competition.

Potential concerns include:

• price fixing;
• output restriction;
• market allocation;
• exchange of sensitive information.

Section 4

Where a dominant enterprise uses benchmarking as part of an abusive strategy.

Potential theories include:

• unfair or discriminatory conditions;
• unfair or discriminatory prices;
• predatory pricing;
• denial of market access;
• leveraging;
• exclusionary conduct.

Combination control

Benchmarking data may also be relevant to:

• market definition;
• competitive effects;
• concentration;
• entry barriers;
• countervailing power;
• efficiencies.

The critical point is that benchmarking itself is not the prohibited conduct. The legal assessment focuses on its purpose, structure, effects and relationship to market power.

12. Benchmarking in Digital Markets

Digital markets make benchmarking particularly sensitive because platforms can collect enormous quantities of real-time information.

A dominant platform may know:

• competitor prices;
• consumer searches;
• conversion rates;
• seller margins;
• customer switching;
• inventory;
• demand elasticity;
• advertising bids;
• transaction volumes.

It can then construct highly sophisticated benchmarks.

For example:

Platform obtains sellers' prices → calculates industry benchmark → ranks sellers against benchmark → penalises sellers below/above benchmark → sellers modify prices → competition becomes increasingly standardised.

This may create a feedback loop:

Data collection → benchmark → behavioural adjustment → reduced variation → stronger benchmark → greater platform power.

13. Algorithmic Benchmarking

AI makes benchmarking substantially more powerful.

Traditional benchmarking:

Quarterly industry report.

Algorithmic benchmarking:

Continuous data collection → real-time competitor monitoring → prediction → automated response.

The DOJ has specifically recognised that pricing algorithms, pricing software and analytical tools can increase the observability of competitors' actions.

Potential risks include:

1. Parallel pricing

Algorithms may repeatedly converge on similar prices.

2. Monitoring

An algorithm can instantly detect a competitor's deviation.

3. Retaliation

The algorithm can automatically respond to a discount.

4. Price leadership

One dominant platform's benchmark may become the reference point for the entire market.

5. Reduced uncertainty

Competition normally involves uncertainty concerning competitors' future behaviour. A sophisticated benchmarking system may substantially reduce that uncertainty.

14. When Benchmarking Becomes Particularly Dangerous

A benchmarking arrangement deserves heightened competition-law scrutiny where it involves:

1. Current information
2. Future pricing information
3. Individual competitor identification
4. Customer-specific information
5. Costs and margins
6. Production/output information
7. High-frequency updates
8. Highly concentrated markets
9. Few competitors
10. Reciprocal information exchange
11. Automated pricing responses
12. A dominant intermediary controlling the database

The combination is more significant than any individual factor.

15. Safe Benchmarking Design

Businesses can reduce competition risk by using:

Aggregation

Instead of:

Firm A = ₹95; Firm B = ₹97; Firm C = ₹100.

use:

Industry average = ₹97.30.

Historical information

Historical information can, depending on circumstances, present less coordination risk than current or future information.

Anonymisation

Participants should not be identifiable from the dataset.

Independent administration

An independent benchmarking provider should prevent participants from accessing competitors' raw submissions.

Minimum participation thresholds

Results should not permit reconstruction of an individual firm's information.

Compliance controls

The programme should prohibit:

• future-price discussions;
• customer allocation;
• output coordination;
• competitor-specific communications;
• exchange of strategic plans.

16. Benchmarking as a Competition-Law Evidence Tool

Benchmarking has another important function: evidence.

Competition authorities can use benchmarks to identify suspicious conduct.

For example:

Observed price

₹150

Competitive benchmark

₹100

Cost

₹70

Industry price

₹95–₹105

A substantial unexplained deviation may justify further investigation.

However, a difference from the benchmark does not automatically prove infringement.

The authority may need to investigate:

• product differences;
• quality;
• geographic conditions;
• demand;
• capacity constraints;
• input costs;
• intellectual property;
• regulation;
• investment;
• risk;
• innovation.

This is particularly important in excessive-pricing cases because courts have recognised that benchmark comparisons must be appropriately constructed.

17. Economic Effects of Benchmarking Monopolies

Potential pro-competitive effects

Benchmarking can:

• reduce information asymmetry;
• increase efficiency;
• reduce costs;
• improve quality;
• encourage innovation;
• identify underperformance;
• facilitate investment;
• improve consumer welfare.

Potential anti-competitive effects

It can also:

• facilitate price coordination;
• reduce strategic uncertainty;
• stabilise prices;
• facilitate monitoring;
• support excessive pricing;
• reinforce dominance;
• raise entry barriers;
• enable discriminatory pricing;
• create dependency upon a dominant benchmark provider.

Therefore, the economic assessment should be effect-sensitive rather than label-sensitive.

18. Benchmarking and the Essential-Facility Problem

A particularly difficult situation arises where a dominant undertaking controls the benchmark that competitors need to operate.

For example:

Dominant exchange controls transaction data → industry benchmark depends upon exchange data → competing firms require benchmark to price products → dominant firm restricts access.

Possible competition-law questions include:

• Is the data indispensable?
• Is there a viable alternative benchmark?
• Is access objectively necessary?
• Does the dominant undertaking have legitimate reasons for refusal?
• Does the refusal disadvantage downstream competitors?
• Does the benchmark provider compete downstream?

This can bring benchmarking into the broader doctrines concerning access, refusal to deal, interoperability and essential facilities.

19. Benchmarking and Standardisation

A benchmark can gradually become an industry standard.

For example:

Benchmark → industry adoption → contractual reference → customer expectation → de facto standard.

If controlled by a dominant undertaking, the benchmark may influence:

• technical specifications;
• pricing;
• contract terms;
• quality standards;
• access conditions.

Competition authorities may therefore examine whether the standard is:

• objectively justified;
• transparently developed;
• accessible;
• non-discriminatory;
• open to competing technologies.

20. Key Distinction: Monopoly Benchmarking vs Benchmarking Cartels

This distinction is essential.

Monopoly benchmarking

One dominant undertaking uses benchmarks to determine its own behaviour.

Primary concerns:

Exploitation + exclusion + discrimination.

Benchmarking cartel

Multiple competitors exchange information or manipulate a common benchmark.

Primary concerns:

Coordination + price fixing + market monitoring.

Dominant benchmark intermediary

One undertaking controls the infrastructure through which competitors obtain benchmark information.

Primary concerns:

Data control + foreclosure + coordination + exclusion.

These three situations should not be treated as legally identical.

21. Compliance Framework

A competition-law compliant benchmarking programme should generally ask:

Step 1 — What information is collected?

Price? Cost? Output? Customers? Future strategy?

Step 2 — Is the information commercially sensitive?

If yes, enhanced safeguards are necessary.

Step 3 — Is the information current?

Current and future information generally presents greater coordination concerns.

Step 4 — Can individual firms be identified?

If yes, competition risk increases.

Step 5 — Is the information aggregated?

Aggregation may reduce the ability to monitor individual competitors.

Step 6 — Who controls the benchmark?

A neutral third party presents different risks from a dominant competitor controlling the system.

Step 7 — How frequently is the benchmark updated?

Real-time benchmarking can present greater coordination risks.

Step 8 — What is the purpose?

Efficiency improvement and legitimate market research differ from price coordination.

Step 9 — What happens after publication?

The legal risk may increase if firms are expected or encouraged to align prices with the benchmark.

Step 10 — Is there a less restrictive alternative?

For example:

historical + aggregated + anonymised data

may achieve much of the legitimate benchmarking objective without exposing individual firms' strategic information.

22. Conceptual Flowchart

Benchmarking Activity

↓

Who controls the benchmark?

→ Dominant firm
→ Independent intermediary
→ Trade association
→ Competitors collectively

↓

What information is used?

→ Public information
→ Historical information
→ Aggregated information
→ Current strategic information
→ Future pricing/output information

↓

Competitive effect

→ Efficiency-enhancing
→ Neutral
→ Coordination-facilitating
→ Exclusionary
→ Exploitative

↓

Applicable competition-law concern

→ No infringement / legitimate benchmarking
→ Information exchange
→ Cartel / concerted practice
→ Abuse of dominance
→ Excessive pricing
→ Predatory pricing
→ Margin squeeze
→ Discriminatory conduct
→ Foreclosure

23. Key Legal Principles Emerging from the Cases

Principle 1

Benchmarking itself is not inherently unlawful.

Principle 2

A benchmark can be legitimate evidence for determining whether a dominant firm's price is excessive.

Principle 3

Cross-market comparisons must be based on appropriate and verifiable comparators.

Principle 4

A benchmark based on competitively sensitive information can facilitate coordination.

Principle 5

An information intermediary does not automatically eliminate cartel risk.

Principle 6

Current, detailed and competitor-specific data presents greater competition concerns than genuinely aggregated historical information.

Principle 7

Algorithmic benchmarking can magnify traditional information-exchange risks because monitoring becomes continuous and automated.

Principle 8

A dominant firm controlling an indispensable benchmark may create additional exclusionary concerns.

Principle 9

A benchmark should not be treated as conclusive proof of excessive or predatory pricing; the underlying economic circumstances must be examined.

Principle 10

The appropriate legal test depends upon market structure, information characteristics, conduct, purpose and effects.

24. Conclusion

Benchmarking monopolies represents an important intersection between market power, information economics and competition law. The concept is not itself an independent competition-law offence. Its legal significance arises from the way benchmarks are created, controlled, shared and used.

The jurisprudence demonstrates two opposite functions of benchmarking.

First, benchmarking can be a competition-enforcement instrument. Cases such as United Brands, AKKA/LAA and SABAM demonstrate how comparisons can be used to determine whether prices charged by dominant or monopolistic undertakings are unfair or disproportionate.

Second, benchmarking can itself become a vehicle for anticompetitive coordination. American Column & Lumber, U.S. Gypsum, the modern Agri Stats matter and the European Commission's ethanol-benchmark enforcement illustrate the risks associated with exchanging or manipulating competitively sensitive information.

The central competition-law question is therefore not:

“Is benchmarking being used?”

but rather:

“Does the benchmarking mechanism improve competitive decision-making, or does it enable a dominant undertaking to exploit market power or enable competitors to coordinate their conduct?”

That distinction is especially important in AI-driven markets, digital platforms, algorithmic pricing, financial benchmarks, energy markets, telecommunications, cloud computing and other data-intensive industries, where benchmarking can shift from an occasional analytical exercise into a continuous mechanism for controlling market behaviour.