Price discriminations: Current issues

Law & Economics workshop organised by Concurrences with Étienne Pfister (Autorité de la concurrence) in partnership with Magenta and NERA Economic Consulting.

Etienne Pfister introduced the speakers and outlined the current state of affairs regarding price discrimination practices. In particular, he mentioned the MEO judgment, delivered on 19 April 2018 by the Court of Justice (C-525/16). With this ruling, the Court of Justice of the European Union clarified the rules applicable to tariff discrimination, at least with regard to so-called "second-level" tariff discrimination (i.e., when the effect of the discrimination is to disadvantage certain purchasers compared to others). At the same time, some attention has recently been paid to new discriminatory behaviour, such as geo-blocking, dual-pricing or online price personalisation through the collection of data on individual buyers.

At the beginning of his speech, Mr. Pfister clarified the terminology of price discrimination behaviour, distinguishing between first-degree discrimination, second-degree discrimination and third-degree discrimination, depending on whether the price depends on the customer’s willingness to pay, the conditions of sale (quantity, date, etc.) or the categories of customers, respectively. It also differentiated between first-level discrimination, where an undertaking discriminates favourably against certain customers with the potential effect of foreclosing competitors (loyalty discounts, selective price discounts, etc.) and second-level discrimination, where an undertaking puts certain customers at a disadvantage compared to others, in which case competition between buyers, and not between sellers, is then distorted.

Photos © Philippe Barbosa

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