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

Danilo Samà

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Fidelity Discounts; Loyalty Rebates; Abuse of Dominant Position; As-Efficient Competitor Test; Consumer Harm; Exclusive Dealing; Foreclosure; Monopolization; Nonlinear Pricing; Predation; Tomra (search for similar items in EconPapers)
JEL-codes: K21 L12 L42 (search for similar items in EconPapers)
Date: 2012
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https://mpra.ub.uni-muenchen.de/103115/1/MPRA_paper_55356.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:55356

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