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EUROPEAN COMMISSION DG Competition - page 72 / 113

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such level(s) as to hinder customers to switch to and purchase substantial additional amounts from other suppliers and thus enhance loyalty.

Standardised Volume Target 159. In case the threshold set is a standardised volume threshold, it is less likely that the rebate system will have a loyalty enhancing effect. Because the volume threshold at which the rebate kicks in is set at the same level for all buyers, the threshold may be too high for smaller buyers and/or too low for large buyers to have a loyalty enhancing effect. The smaller buyers may never reach the threshold, while the larger buyers may purchase considerably more than the threshold. In such a case the rebate system is unlikely to have a foreclosure effect as switching to an alternative supplier for part of its demand currently purchased from the dominant company will not make the buyer lose the rebate. In general a rebate system with standardised volume thresholds is therefore less likely to be found abusive. If, however, it is established that the

standard volume threshold(s) is (are) well targeted, for instance because most of the buyers are purchasing more or less the same amount close to the threshold or can be classified in a limited number of size groups while combined with a linked grid of thresholds, the Commission will presume that it (they) is (are) set at such level(s) as to hinder customers to switch to and purchase substantial additional amounts from other suppliers and thus enhance loyalty.

Did customers know their target & level of rebate? 160. For the assessment whether the loyalty enhancing effect and foreclosure effect of a rebate scheme are market distorting it may also make a difference whether the customers are left in uncertainty as to the level of the target threshold and/or the level of the rebate. Such uncertainty may, where the customers want to minimise the risk of not obtaining the rebate, induce further loyalty.105 Similarly, uncertainty on the part of the customers whether they will be able during the reference period to reach the target threshold may, especially in case of a longer reference period, induce further loyalty. Evidence of this could be obtained from customers of the dominant company. This type of effect will in particular play a role in case the rebate is so high

105 See Case 85/76 Hoffmann-La Roche, cited in footnote 5, paragraphs 98-100; Case 322/81 Michelin I, cited in footnote 26, paragraphs 83-84; Case T-203/01 Michelin II, cited in footnote 59, paragraphs 111 and 141.

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