Compliance and Regulation Law bilingual Dictionnary

Tarification

by Marie-Anne Frison-Roche

Pricing is the result of an act of will whereby an organization determines an amount or method of calculation to obtain an amount it allocates to a good or service. Pricing is in contrast with price, which in turn results spontaneously from the market mechanism and the competition that governs it.

Pricing is a preferred ex ante tool for Regulation. It is favored when it comes to fixing access costs for users to essential infrastructure networks, which are economic monopolies. In a process of liberalization, because Regulation is then designed to build competition, competitive maturation will lead to the exit from "regulated prices", ie pricing, to "free prices", that is to say market prices.

Electrical experience has shown that sometimes it is politically appropriate to allow those who have chosen the vagaries of market price movements to return under the shelter of tariffs.

There are multiple pricing methods, France preferring pricing in relation to costs, U.K. preferring the price cap method.

 

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