Article 82 Rebates: Four Common Fallacies

Maier-Rigaud, Frank (2006) Article 82 Rebates: Four Common Fallacies, European Competition Journal, 2, 85-100.

21 Pages Posted: 21 Jun 2006 Last revised: 16 Jul 2015

See all articles by Frank P. Maier-Rigaud

Frank P. Maier-Rigaud

ABC economics; IESEG School of Management (LEM-CNRS), Department of Economics and Quantitative Methods

Date Written: May 1, 2011

Abstract

In light of the ongoing review of the policy on the application of Article 82 EC by the European Commission, this paper first describes how to calculate potential foreclosure effects and then sets out some common fallacies to be found in the discussion of rebate schemes. The paper discusses the averaging fallacy in calculating foreclosure in rebate schemes, addresses the ex post fallacy, according to which demand realizations ex post are evidence for determining foreclosure and the coverage fallacy according to which low market coverage implies a lack of foreclosure. The discussion of the case-by-case fallacy focuses on the idea that even if a subset of rebate schemes could be justified by efficiencies, alternative pricing instruments may have the same beneficial effects without negative effect on competition and even a flat out prohibition may therefore not reduce but increase welfare. I conclude with a more general discussion of the role of economic analysis in competition policy.

Keywords: Competition policy, Rebates, Article 82 EC, Article 102 TFEU, per se abuse; retroactive rebates, loyalty rebates

JEL Classification: K21, L41, L42

Suggested Citation

Maier-Rigaud, Frank P., Article 82 Rebates: Four Common Fallacies (May 1, 2011). Maier-Rigaud, Frank (2006) Article 82 Rebates: Four Common Fallacies, European Competition Journal, 2, 85-100., Available at SSRN: https://ssrn.com/abstract=910805

Frank P. Maier-Rigaud (Contact Author)

ABC economics ( email )

Berlin, 10115
Germany
10115 (Fax)

HOME PAGE: http://www.ABCecon.com

IESEG School of Management (LEM-CNRS), Department of Economics and Quantitative Methods ( email )

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France

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