Price Discrimination

Abstract

In recent years the scope for near perfect price discrimination, particularly in the digital economy, appears to have grown. This raises a question over how those jurisdictions in which exploitative price discrimination is an offence will respond. In contrast, the risk of price discrimination distorting downstream markets does not appear to have changed, and instead the debate has been on whether the rules and case law have an economic basis, and if not, how agencies might prioritise cases. In this paper, we set out the benefits of price discrimination as well as the concerns over its potential exploitative, distortionary, and exclusionary effects and describe analytical frameworks for assessing these, as well as possible remedies. We distinguish these cases from those investigations where there is a different policy rationale, such as fairness or another policy goal.

Keywords: price discrimination, abuse of dominance, competition, exploitative, exclusionary

JEL Classification: L40, L50