LAW AND ECONOMY : BUNDLED SALES - ASSOCIATED SALES - REBATES - PERIOD - TIME - VOLUME - CONSUMERS - ECONOMIES - COSTS - COMPETITION ON THE MERITS - TREATMENT

Pricing practices: Bundled sales and rebates

Firms often choose to sell several products as a bundle, associated with a rebate. In other cases, they offer rebates to those clients who commit to buy their products for a long period of time, or for a high volume. In many cases, these various rebates only pass on to consumers the economies of costs that the firms obtain themselves when they sell bundles, or when they benefit from a stable commitment from their buyers either regarding the length or the volume of their purchase. But in other cases, these commercial practices implemented by dominant firms prevent a competition “on the merits” to develop on the market and exclude some competitors to the detriment of consumers. Whereas the form based approach only checks whether the practice is indeed implemented by a dominant firm, the effects based approach focuses on the existence of a competitive harm. This allows a more rigorous and uniform treatment of these practices. These three papers develop the reasoning and the economic analysis followed by such an approach and analyze how the case law has evolved regarding the implementation of an effects based approach.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. Pricing practices: Coupling discounts and loyalty discountsPricing practices of dominant companies : Loyalty rebates, volume rebates, coupling rebates, limits Anne Perrot Vice-President, Competition Authority 1. Firms are often led to deviate from so-called linear pricing schemes, i.e. those where a fixed unit price applies to all units sold [1]. For example, a quantity rebate offers a unit price that decreases with the quantities purchased: the total amount paid by the buyer then increases less than proportionally to the volume. In a coupling rebate, the price paid by the buyer for two goods purchased together is less than the sum of the prices of the

Access to this article is restricted to subscribers

Already Subscribed? Sign-in

Access to this article is restricted to subscribers.

Read one article for free

Sign-up to read this article for free and discover our services.

 

PDF Version

Authors

Quotation

Eric Morgan de Rivery, Francesco Rosati, Anne Perrot, Eric Barbier de la Serre, Pricing practices: Bundled sales and rebates, May 2012, Concurrences N° 2-2012, Art. N° 44446, www.concurrences.com

Visites 2189

All reviews