An Evidence-Based Approach to Exclusive Dealing and Loyalty Discounts

Global Competition Policy, No. 1, July 2009

George Mason Law & Economics Research Paper No. 09-32

7 Pages Posted: 18 Jul 2009

Date Written: July 15, 2009

Abstract

At the recent Section 2 hearings focused on the antitrust analysis of exclusive dealing contracts, a sensible consensus view emerged that a necessary condition for anticompetitive harm in an exclusive dealing or de facto exclusive contract is that the contract deprives rivals of the opportunity to compete. These contracts, including market-share discounts and “loyalty discounts,” can harm competition when they deprive rivals of an entrenched firm from accessing distribution sufficient to achieve a minimum efficient scale. The recently-withdrawn Section 2 Report reflects this consensus. This article discusses the strengths and weaknesses of the Section 2 Report approach to exclusive dealing and loyalty discounts.

Keywords: antitrust, consumer, David Evans, entrant, entry, exclusion, free ride, Heide, monopolist, predation, retailers

JEL Classification: K21, L41, L42, L44

Suggested Citation

Wright, Joshua D., An Evidence-Based Approach to Exclusive Dealing and Loyalty Discounts (July 15, 2009). Global Competition Policy, No. 1, July 2009, George Mason Law & Economics Research Paper No. 09-32, Available at SSRN: https://ssrn.com/abstract=1434406

Joshua D. Wright (Contact Author)

Lodestar Law and Economics ( email )

P.O. Box 751
Mclean, VA 22101
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
557
Abstract Views
4,247
Rank
90,576
PlumX Metrics