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Ahlborn, Christian; Bailey, David --- "Discounts, Rebates and Selective Pricing by Dominant Firms: A Trans-Atlantic Comparison" [2006] ELECD 524; in Marsden, Philip (ed), "Handbook of Research in Trans-Atlantic Antitrust" (Edward Elgar Publishing, 2006)

Book Title: Handbook of Research in Trans-Atlantic Antitrust

Editor(s): Marsden, Philip

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845421816

Section: Chapter 7

Section Title: Discounts, Rebates and Selective Pricing by Dominant Firms: A Trans-Atlantic Comparison

Author(s): Ahlborn, Christian; Bailey, David

Number of pages: 41

Extract:

7 Discounts, rebates and selective pricing by
dominant firms: a trans-Atlantic
comparison
Christian Ahlborn and David Bailey


A. Introduction
The antitrust control of discounts and selective pricing by dominant firms
is commanding a lot of attention in Europe and elsewhere at the moment.
On both sides of the Atlantic there has been high-profile enforcement activ-
ity. Two cases decided in 2003 (Michelin v. Commission and British Airways
v. Commission) are among the most prominent and controversial in the EU.
Separately in the US private actions in particular have challenged the dis-
counting practices of dominant companies, notably in Virgin v. British
Airways1 and 3M v. LePage's,2 respectively. Action by the Canadian
Commissioner of Competition in Canada Pipe3 provides yet another
example of recent intervention.
The high level of enforcement activity has exposed fundamental
differences in analytical approach between Europe, on the one hand, and
North America, on the other. In the EU, Michelin II and Virgin/British
Airways involved loyalty-inducing schemes which were deemed by the
European Commission and the Court of First Instance (CFI) to have an
exclusionary structure and were prohibited per se. They are symptomatic
of a broader trend in the application of EC law to unilateral conduct, which
has long been insufficiently based on economic analysis. In contrast, the
authorities and courts in the US and Canada have generally adopted a less
interventionist approach towards rebates and discounts, preferring to focus
on whether anticompetitive effects are realistic or not.
At the ...