Loyalty Discounts And The FTC’s Lawsuit Against Intel
The Journal of the Antitrust and Unfair Competition Law Section of the State Bar of California, Vol. 19, No. 1, Spring 2010
19 Pages Posted: 4 Dec 2010
Date Written: April 1, 2010
Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liability. This paper explains that the antitrust law governing these discounts is unclear, confusing, and constantly changing. The structure of the loyalty discount will determine how a court is likely to analyze it, choosing from one or more of the following frameworks: predatory pricing, leveraging, and foreclosure. The Federal Trade Commission's recent lawsuit against Intel (now settled) made the landscape for businesses even less certain by advancing theories under both Section 5 of the FTC Act and Section 2 of the Sherman Act that are not supported by existing antitrust law.
Keywords: Antitrust, Loyalty Discounts, Federal Trade Commission, FTC, Bundling, Predatory Pricing, Linkline, Brooke Group, Leveraging, Monopoly, Monopolization, Exclusionary Conduct, Discount Attribution, Foreclosure, Market-Share Discounts, Exclusive Dealing, Intel, Sherman Act, Section 5 of the FTC Act
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