Price-Cost Tests in Antitrust Analysis of Single Product Loyalty Contracts PDF Download
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Author: Benjamin Klein Publisher: ISBN: Category : Languages : en Pages : 50
Book Description
This article examines the conditions when predatory pricing or exclusive dealing antitrust principles should be the controlling legal standard for the evaluation of single product loyalty discount contracts. Following Meritor, it clarifies what it means for price to be “the predominant mechanism of exclusion” in a loyalty contract, and therefore for price-cost considerations to be a relevant element of the analysis. Loyalty contracts are shown to be a way by which firms efficiently reduce the price of incremental sales, with effects similar to the commonly recognized competitive use of price discounts in Brooke Group. Rather than assuming a loyalty contract involves exclusive dealing, antitrust analysis in all cases requires determining whether a de facto exclusive dealing arrangement has been created where equally efficient rivals cannot compete for contestable sales.
Author: Benjamin Klein Publisher: ISBN: Category : Languages : en Pages : 50
Book Description
This article examines the conditions when predatory pricing or exclusive dealing antitrust principles should be the controlling legal standard for the evaluation of single product loyalty discount contracts. Following Meritor, it clarifies what it means for price to be “the predominant mechanism of exclusion” in a loyalty contract, and therefore for price-cost considerations to be a relevant element of the analysis. Loyalty contracts are shown to be a way by which firms efficiently reduce the price of incremental sales, with effects similar to the commonly recognized competitive use of price discounts in Brooke Group. Rather than assuming a loyalty contract involves exclusive dealing, antitrust analysis in all cases requires determining whether a de facto exclusive dealing arrangement has been created where equally efficient rivals cannot compete for contestable sales.
Author: Patrick Greenlee Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Consider a monopolist in one market that faces competition in a second market. Bundled loyalty discounts, in which customers receive a price break on the monopoly good in exchange for making all purchases from the monopolist, have ambiguous welfare effects. To analyze such discounts as predatory pricing is incorrect. In some settings, they act as tie-in sales. Existing tests for whether such discounts violate Section 2 of the Sherman Act do not track changes in consumer surplus or total surplus. We present a new test and use it in an illustrative example based on SmithKline that assumes the "tied" market is a homogeneous good. If the tied market is characterized by Hotelling competition, bundling by the monopolist causes the rival firm to reduce its price. In numerical examples, we find that this can deter entry or induce exit.
Author: Robert Bork Publisher: ISBN: 9781736089712 Category : Languages : en Pages : 536
Book Description
The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.
Author: Phillip Areeda Publisher: Aspen Publishers ISBN: Category : Antitrust law Languages : en Pages : 100
Book Description
Reorganized for increased accessibility, The 1997 edition of ANTITRUST ANALYSIS presents coverage of current issues with the same incisive -- and effective -- approach that has earned the book its premier reputation in the field. The distinctive emphasis on textual explanations that has always characterized Antitrust Analysis continues in the Fifth Edition. These strong textual discussions convey essential background information and necessary economic principles. Further, less significant cases have been trimmed. The authors' vast expertise in antitrust and economics is shown in a casebook of truly unrivaled quality. ANTITRUST ANALYSIS, Fifth Edition, opens with a clear introduction To The history of antitrust law and a cogent presentation of important economics material. The authors then explore: horizontal agreements monopolization vertical agreements mergers price discrimination Reflecting ongoing movement in the antitrust arena, Areeda and Kaplow now address new developments in: intellectual property health care international aspects of antitrust law
Author: Miroslava Marinova Publisher: Kluwer Law International B.V. ISBN: 9403505710 Category : Law Languages : en Pages : 226
Book Description
This book examines the treatment of fdelity rebates as one of the most controversial topics in EU competition law. The controversy arose from the lack of clarity as to how to distinguish between rebates that constitute a legitimate business practice and those that might have anticompetitive e?ects, as the same type of rebates could be pro-competitive or anticompetitive depending on their e?ects on competition. This book clarifes the appropriate treatment of fdelity rebates under EU competition law by o?ering original insights on the way in which abusive rebates should be identifed, taking into account the wealth of EU case law in this area, the economics' literature and the perspective of US antitrust law. The critical discussion on the case law is centred on the idea as to whether the as efcient competitor (AEC) test is an important part of the assessment of fdelity rebates and in which circumstances it could be used as one tool among others. The analysis treats such issues and topics as the following: – What motivated the EU Courts to treat fdelity rebates as illegal ‘by object'? – Why has this case law drawn so much criticism from academics and other commentators? – What can we learn from the economic theories of exclusive dealing and fdelity rebates, and whether the strict approach of the Courts can be supported by economic empirical studies? – What is the meaning attached to the notion of an ‘e?ects-based' approach as an expression of the reform of Article 102? – Why is the controversy regarding the treatment of fdelity rebates still a live issue after the Intel and the Post Danmark II judgments? – In which circumstances the price-cost test can be used as a reliable tool to distinguish between anticompetitive and pro-competitive fdelity rebates? – Can we evaluate the e?ect of fdelity rebates without necessarily carrying out a price-cost test? – Can we consider the AEC test as a single unifying test for all types of exclusionary abuses? – What can we learn about the application of the AEC test in fdelity rebate cases from the recent US case law? A concluding chapter provides an original perspective and also policy recommendations on how the abusive character of fdelity rebates should be assessed including an appropriate legal test that is administrable, creates predictability and legal certainty and minimises the risk of errors and the cost of those mistakes. This book takes a giant step towards improving the understanding of the legal treatment of fdelity rebates and understanding as to whether the treatment of fdelity rebates could be e?ects-based, without necessarily carrying out an AEC test. It will also contribute signifcantly to the practical work of enforcement agencies, courts and private entities and their advisors. book's parallel study of US and EU competition law.
Author: Herbert Hovenkamp Publisher: ISBN: Category : Languages : en Pages : 40
Book Description
A bundled discount occurs when a seller conditions a discount or rebate on the buyer's purchaser or two or more different products. Firms that produce fewer than all the good in the bundle find it difficult to compete because they must amortize the discount across a smaller range of goods. For example, if the dominant firm offers a 10% discount for purchase of both good A and good B, but the rival makes only good B, it will have to offer a discount that is large enough to match the dominant firm's B discount as well as the foregone discount on A. The Antitrust Modernization Commission and several courts have adopted an quot;attributionquot; test for assessing the antitrust legality of bundled discounts. The test attributes the full discount to the product(s) for which rivals are claiming exclusion, and asks whether the resulting price is below cost. This test contains some features of the cost-based rule for single product predatory pricing, but it also differs in important respects. Both tests query whether an equally efficient rival can match the dominant firm's price. On the other hand, bundles that fail the attribution test can still be quot;sustainable.quot; That is, they need not involve pricing below cost, and thus their success does not depend on recoupment during a subsequent period of higher prices.Most models of bundled discounting consider two goods that are purchased in a one-to-one ratio. None of the judicial decisions involve such simplicity. In most the bundle consists of more than two goods, and different rivals may produce differing subsets of the dominant firm's bundle. Further, in nearly all of the cases the proportion of goods in the bundle can be varied at the will of the customer. We show that in such situations antitrust analysis of the bundle is significantly more complex and anti-competitive exclusion must typically be assessed on a rival-by-rival and customer-by-customer basis. This has important implications for the certification of class actions in bundled discount cases. We also provide some apparatus for assessing bundled discounts in these situations.
Author: Roger D. Blair Publisher: Oxford Handbooks ISBN: 0199388598 Category : Business & Economics Languages : en Pages : 665
Book Description
More than any other area of regulation, antitrust economics shapes law and policy in the United States, the Americas, Europe, and Asia. In a number of different areas of antitrust, advances in theory and empirical work have caused a fundamental reevaluation and shift of some of the assumptions behind antitrust policy. This reevaluation has profound implications for the future of the field. The Oxford Handbook of International Antitrust Economics has collected chapters from many of the leading figures in antitrust. In doing so, this two volume Handbook provides an important reference guide for scholars, teachers, and practitioners. However, it is more than a merely reference guide. Rather, it has a number of different goals. First, it takes stock of the current state of scholarship across a number of different antitrust topics. In doing so, it relies primarily upon the economics scholarship. In some situations, though, there is also coverage of legal scholarship, case law developments, and legal policies. The second goal of the Handbook is to provide some ideas about future directions of antitrust scholarship and policy. Antitrust economics has evolved over the last 60 years. It has both shaped policy and been shaped by policy. The Oxford Handbook of International Antitrust Economics will serve as a policy and research guide of next steps to consider when shaping the future of the field of antitrust.
Author: Chiara Fumagalli Publisher: Cambridge University Press ISBN: 1108546803 Category : Business & Economics Languages : en Pages : 651
Book Description
The most controversial area in competition policy is that of exclusionary practices, where actions are taken by dominant firms to deter competitors from challenging their market positions. Economists have been struggling to explain such conduct and to guide policy-makers in designing sensible enforcement rules. In this book, authors Chiara Fumagalli, Massimo Motta, and Claudio Calcagno explore predatory pricing, rebates, exclusive dealing, tying, and vertical foreclosure, through a blend of theory and practice. They develop a general framework which builds on and extends existing economic theories, drawing upon case law, discussions of cases and other practical considerations to identify workable criteria that can guide competition authorities to assess exclusionary practices. Along with analyses of policy implications and insights applied to case studies, the book provides practitioners with non-technical discussions of the issues at hand, while guiding economics students with dedicated technical sections with rigorous formal models.
Author: Benjamin Klein
Author: Benjamin Klein
Author: Patrick Greenlee
Author: Bruce H. Kobayashi
Author: Patrick Greenlee
Author: Robert Bork
Author: Phillip Areeda
Author: Miroslava Marinova
Author: Herbert Hovenkamp
Author: Roger D. Blair
Author: Chiara Fumagalli