Loyalty/Requirement Rebates and the Antitrust Modernization Commission: What is the Appropriate Liability Standard?

Nicholas Economides ()

No 09-02, Working Papers from NET Institute

Abstract: I discuss and assess the various standards for establishing liability for loyalty discounts offered under a requirement contract. I find that the standard proposed by the Antitrust Modernization Commission is likely to result in many cases of violation that are not caught. The safe harbor defined by the AMC would permit activity that is in fact anticompetitive. I propose instead a structured rule of reason test that relies on consumers’ surplus comparisons under the loyalty /requirement practice and the but-for world. The proposed standard does not have a safe harbor based on a price/cost comparison because such comparisons do not generally correspond to consumers’ surplus comparisons.

Keywords: bundling; loyalty discounts; requirement contracts; monopolization; antitrust (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-03, Revised 2009-03
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.stern.nyu.edu/networks/Economides_Loyal ... ntitrustBulletin.pdf (application/pdf)
no

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:0902

Access Statistics for this paper

More papers in Working Papers from NET Institute
Bibliographic data for series maintained by Nicholas Economides ().