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EUROPEAN COMMISSION DG Competition - page 73 / 113





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that without the rebate the customer can not make a profit when using or reselling the product concerned.106

Conditions when rebate or single branding likely to be abusive 161. The case law of the Community Courts gives some relevance to the length of the reference period and as stated in the previous paragraph this factor may have an impact on the degree of uncertainty felt by the customer. However, in most cases the length of the reference period has no bearing on the loyalty enhancing effect. The exception is where the dominant company is no longer an unavoidable trading partner. This could be the case where the reference period is very short and therefore the customer’s requirements in that period so low that the different competitors can compete for all requirements of the customer in that period, in which case the rebate system will normally not have a loyalty enhancing effect (see also paragraphs 143 and 146). This could also be the case where the product is homogeneous, in which case a long reference period and a high threshold may work as a disincentive to switch supplier after having started to purchase from the dominant supplier.107

Conditions when rebate or single branding likely to be abusive

  • 162.

    In view of the above, where it is established that:

    • (a)

      The dominant company applies a conditional rebate system where the rebates are granted

on all purchases in a particular period once a certain threshold is exceeded, and

(b) There is no indication that this threshold is set so low that for a good part of the dominant company’s buyers it can not hinder them to switch to and purchase substantial additional amounts from other suppliers without losing the rebate, and

(c) The required share exceeds the commercially viable amount per customer, and

106 This is for instance clearly the case if the list price, i.e. the price without the rebate, is above the resale price on the downstream (distribution) market. There is a similarity here with the conclusion that in general the duration of single branding obligations is not relevant for their assessment under Article 82 (see footnote 94). 107

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