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EUROPEAN COMMISSION DG Competition - page 75 / 113





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164. Where it is not possible to establish accurately the required share because reliable information on the dominant company’s costs is not available, the Commission may use cost data of apparently efficient competitors. Where it is in general not possible to accurately establish the required share or the commercially viable share, the Commission will overall assess to what extent the rebate system hinders expansion or entry by competitors. It will do so by investigating the market performance of the dominant company and its competitors, preferably by comparing the situation before and after the rebate system was introduced. It will amongst others estimate the importance of the rebate by comparing its size to the full price per unit of product and will assess the indications of an actual foreclosure effect such as exit or decliningmarket shares of competitors or de-listing of their products.

165. In case it is clearly established that the effective price is above ATC, it is unlikely

that the Commission will conclude that a market distorting foreclosure effect results. However, exceptionally this may be concluded, for instance if it is established that the dominant company operates in a market where it has certain non-replicable advantages and that the rebate system is likely to exclude entrants that would help the competitive situation on the market to improve. In such a situation the dominant company could prevent entry or eliminate entrants by using rebates while the effective price stays above its own ATC. For such rebates to be assessed as abusive additional elements will have to be shown, in this case that the entrant will only be less efficient because of these non-replicable advantages. CONDITIONAL REBATES ON INCREMENTAL PURCHASES ABOVE THE THRESHOLD

Important whether rebate retrospective or incremental 166. Whether the conditional rebate is available to all purchases below and above the threshold once the latter is exceeded or only to incremental purchases above the threshold makes an important difference to the way possible loyalty enhancing effects are induced and how they are assessed.108 In case the rebate is only available to incremental purchases, the dominant supplier, in order to create in a cost efficient way a loyalty enhancing effect, will try to set the threshold at

108 This applies to percentage rebates. A rebate in the form of a lump sum once the threshold is exceeded is by definition available for all purchases.

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