'Consumer' versus 'Customer': the Devil in the Detail

Pinar Akman ()
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Pinar Akman: Centre for Competition Policy, University of East Anglia

No 08-34, Working Papers from Centre for Competition Policy, University of East Anglia

Abstract: The ultimate objective of EC competition rules is arguably the enhancement of ‘consumer welfare’. In EC competition law, however, ‘consumer’ merely means ‘customer’. Not being limited to final consumers, the concept also encompasses intermediate customers. Moreover, according to the EC Commission, under Article 82EC, harm to intermediate customers is generally presumed to create harm to consumers and where intermediate customers are not competitors of the dominant undertaking, there is no requisite to assess the effects of conduct on users further downstream. This paper questions the appropriateness of this presumption in light of recent advances in economics, specifically that of vertical restraints and in particular non-linear pricing. It uses this literature to show that there are many instances where an increase (decrease) in ‘customer welfare’ does not cause an increase (decrease) in ‘consumer welfare’. In these cases, the presumption is devoid of economic justification and likely to lead to decisional errors. The paper concludes that if the law is to serve the interests of ‘real’ consumers, the EC Commission should reconsider this presumption and its interpretation of the ‘consumer’ in ‘consumer welfare’. Until then, it remains questionable and objectionable whose interests EC competition law and in particular, Article 82EC, serve.

Keywords: Article 82EC; abuse of dominance; consumer welfare; customer welfare; final consumers; intermediate customers (search for similar items in EconPapers)
JEL-codes: K21 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-11
New Economics Papers: this item is included in nep-com, nep-law, nep-mkt and nep-reg
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