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EUROPEAN COMMISSION DG Competition - page 106 / 113

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from future customers of primary product 254. It is useful to distinguish the effect of a dominant position on the aftermarket on customers who may buy the primary product in the future and customers who have already bought the primary product.146 As described in detail below, competition in the primary market may allow future customers to avoid negative effects of high aftermarket prices.147 However, competition in the primary market does not protect customers who have already bought the primary product from being harmed if the supplier changes policy and raises prices or lowers quality after the customer bought the primary product.

Future customers may be protected by the primary product 255. Future customers may be protected from harm by competition in the primary product market. A supplier of a primary product will consider the effects on sales in the primary market of the price and quality of products and services in the aftermarket. There are two reasons for which the supplier may want to keep aftermarket prices low or compensate high aftermarket prices by lowering prices in the primary market so as to keep the overall price the customer pays for the “bundle” of primary and secondary products attractive.

Consumers of primary product may be concerned about cost of replacement parts 256. First, consumers may base their purchasing decision not only on the price of the primary product but also on the aftermarket prices. Secondly, even if consumers are not basing their choice on accurate life cycle calculations, the competitors of the supplier in the primary market are supposedly able to make such calculations and may compete hard on primary market prices while enjoying profits on the subsequent aftermarket sales. As a result, the supplier may not be enjoying high overall (“bundle” or “systems”) profits even though aftermarket prices are high.

The information available to consumers is important

146 Although some of those who have already bought the primary product probably are potential future customers as well; for instance, when they need to replace their existing equipment. However, as noted below, even with respect to future purchases their situation may be different from other customers who have not yet bought the primary product. In the following, the expression “higher prices” in the aftermarket should be understood to also cover the possibility of lower quality. 147

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