Post Danmark II, or the Quest for Administrability and Coherence in Article 102 TFEU

Abstract

The legal status of quantity rebates under Article 102 TFEU is unclear. In Post Danmark II, the ECJ has been asked to provide a substantive test to establish whether this practice amounts to an abuse of a dominant position. As the case law stands, two possible approaches can be followed. Quantity rebates can be assessed in accordance with the framework sketched by the Court in Michelin I, or they can be subject to the principles applying to other price-based strategies such as ‘margin squeeze’ abuses and selective price cuts. There are compelling reasons to follow the latter approach. The criteria set out in Michelin I were conceived for target rebates, which – unlike quantity-based schemes – are not presumptively legal under Article 102 TFEU. In addition, the said criteria are not administrable, in the sense that they do not make it possible to define in advance whether a given rebate scheme is lawful or unlawful. In practice, and in contradiction with the logic underlying Michelin I, it is sufficient for a competition authority or a claimant to identify some ‘loyalty-inducing’ features to establish an abuse. As such, they are not suitable for their application in disputes before national courts, or by national competition authorities.