Chiara Muraca

«The times are a-changing»: For a renewed approach on fidelity discounts

  • Abstract

Informations and abstract

Keywords: Abuse of Dominant Position; Loyalty Rebates; Fidelity Discounts; Unilateral Conduct.

Starting from a comparative analysis of the United Stated and Europe approaches and following the teachings of the economic thinking, this paper aims at discussing the different legal standards that can be applied to make a competitive assessment of fidelity discounts. It proposes to abandon strict formal distinctions as to the categories of rebates, and to develop a structured case by case approach, grounded on economic efficiencies tested empirically. Namely, granted the role that a proper classification of possible discount schemes plays in setting the stage for the analysis, the paper will maintain that fidelity rebates can be considered as conditional pricing schemes that may have lock-in effects and induce to loyalty due to their mighty economic incentives. Secondly, the article will remark that in some circumstances loyalty rebates do benefit consumers even when used by dominant firms and, therefore, a per se approach would be inappropriate. Hence - the argument will proceed - the liability conditions adopted to assess fidelity rebates must find the right balance between the will to encourage discounts benefitting consumers and the need to protect the well-functioning of the market (as it results from consumer welfare variations).

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