The antitrust treatment of loyalty discounts and rebates in the EU competition law: in search of an economic approach and a theory of consumer harm

Samà, Danilo (2012) The antitrust treatment of loyalty discounts and rebates in the EU competition law: in search of an economic approach and a theory of consumer harm. [Working Paper]. p. 44. (Submitted)

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Abstract/Index

In the paper, the fundamental question is under what conditions loyalty discounts and rebates adopted by a dominant firm cause anti-competitive effects. Fidelity schemes, although extremely frequent in the market, if applied by a dominant firm, are likely to be judged as illegal per se, as demonstrated by the EU case-law delivered so far and the severe scrutiny reserved by the national competition authorities. As a result, the paper first provides an analytical overview of loyalty structures, focusing in particular on retroactive rebates, and elaborates on important economic implications, such as the lock-in and the suction effect. The work then discusses the novelties introduced by the Guidance Paper on the Application of Art. 102 of the TFEU, which calls for an effects-based analysis of exclusionary abuses. Therefore, after an in-depth evaluation of the as-efficient competitor test, the new approach of the European Commission towards loyalty discounts and rebates is discussed in details with reference to a controversial antitrust case recently examined at EU level (Tomra). The paper finally proposes a systematic economic framework for analysing the effects, and therefore the legality, of fidelity schemes, in the light of a consistent theory of consumer harm.

Item Type: Report / Paper (Working Paper)
Research documents and activity classification: Working Papers > Refereed Working Papers / of international relevance
Divisions: Department of Business and Management
Uncontrolled Keywords: Fidelity discounts. Loyalty rebates. Abuse of dominant position. As-efficient competitor test. Consumer harm. Exclusive dealing. Foreclosure. Monopolization. Nonlinear pricing. Predation. Tomra.
MIUR Scientific Area: Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Area 13 - Economics and Statistics > SECS-P/06 Applied Economics
Deposited by: Danilo Sama
Date Deposited: 24 Apr 2014 14:34
Last Modified: 22 Apr 2015 00:15
URI: http://eprints.luiss.it/id/eprint/1308

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