A Proposed Test for Separating Pro-Competitive Conditional Rebates from Anti-Competitive Ones

44 Pages Posted: 14 Dec 2008  

Damien Geradin

Tilburg Law & Economics Center (TILEC); University College London - Faculty of Laws

Date Written: December 12, 2008

Abstract

While the granting of rebates is a common commercial practice largely used by dominant and non-dominant firms, the assessment of rebates is one of the most complex and unsettled areas of competition law. In the EU, the decisional practice of the European Commission and the case-law of the Community courts have been harshly criticized as unnecessarily strict, following a form-based approach that sits uneasily with modern economic theory. In response, DG COMP published in December 2005 a Discussion Paper that promotes an effects-based approach to the assessment of rebates. This approach was recently confirmed in the Guidance Paper of the Commission on Article 82 EC published by in December 2008. US courts have generally shown greater deference to conditional rebates adopted by dominant firms, but the case-law remains unsettled, notably in the area of bundled rebates. Against this background, this paper proposes an analytical framework, based on a three-step test, designed to separate pro-competitive rebates from anti-competitive ones. A particular emphasis will be placed on the treatment of single product retroactive rebates, which create complex issues.

Keywords: rebates, discounts, antitrust, competition, foreclosure, efficiencies, Article 82, Section 2, bundled rebates

JEL Classification: D4, K21, L 41, L42

Suggested Citation

Geradin, Damien, A Proposed Test for Separating Pro-Competitive Conditional Rebates from Anti-Competitive Ones (December 12, 2008). Available at SSRN: https://ssrn.com/abstract=1315292 or http://dx.doi.org/10.2139/ssrn.1315292

Damien Geradin (Contact Author)

Tilburg Law & Economics Center (TILEC)

Tilburg, 5000 LE
Netherlands

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

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