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potential suppliers on the upstream market. It is considered that in most cases a negative effect on competition between the customers on the downstream market is unlikely unless competitors are foreclosed from the upstream market.

Discrimination to exploit customers 141. To the extent that the discrimination has the intention and/or effect to directly exploit (certain of) the customers, this is not dealt with. Such direct exploitation may

in particular be the case where unconditional rebates are used.87 The direct exploitation takes place by discriminating between customers and making customers with a higher willingness to pay and less switching possibilities pay a higher price than others.88 The exclusionary rebates dealt with in this section do not result in higher prices for those customers that can not and do not switch, but higher prices for the customers that are less loyal to the supplier, i.e. the customers that do switch. Exclusionary rebates are in general conditional rebates which may differentiate the price for each customer, depending on its purchasing behaviour, in order to obtain more purchases from these customers, thus leading to infra-personal but not necessarily inter-personal price discrimination. To the extent that this may also lead to discrimination between customers, this may have the effect of distorting competition between the buyers on the down-stream market as described in the previous paragraph.

7.2 ASSESSMENT

This section deals with negative effects in the market where Domco is dominant 142. The single branding obligations and rebate systems that are dealt with in this section are applied by the dominant company for a particular product and have their possible negative effects in the market where it is dominant. Single branding obligations and rebate systems that

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Case T-219/99 British Airways plc v Commission (17 December 2003) not yet reported, paragraphs 233-240. It should be noted that a discriminatory effect may be an indication for an abuse but absence of such an effect does not place a rebates system out of the reach of Article 82. See Case 322/81 Michelin I, cited in footnote 26, where the Court of justice found breach of Article 82 although it did not uphold the Commission’s complaint that the rebates were discriminatory, see also Case T- 219/99 British Airways, paragraphs 248-249. As indicated by the example in paragraph 138 of a rebate that is offered only to customers that might more easily switch to foreign suppliers because they are located in the border region, unconditional rebates can also be used for exclusionary purposes. The lower price for other customers may at the same time induce extra customers to purchase from the supplier.

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