How should price discrimination be dealt with by competition authorities?

In the last two years, the treatment of price discrimination under Article 82 has been the subject of intense debate, both by economists and legal commentators. This article discusses the economics of price discrimination and offers some tentative policy recommendations. In particular, we argue that price discrimination should only in exceptional circumstances constitute an abuse of Article 82 in itself. In exclusionary cases, price discrimination will be the manifestation of exclusionary pricing but does not constitute an abuse in itself. Hence the analysis of exclusionary effects of pricing policies should be sufficient without the need to investigate price discrimination as such. In other cases (“secondary line” price discrimination, geographic discrimination or exploitative price discrimination), the effects of price discrimination on competition and consumer welfare are extremely ambiguous. Overall, these insights call for a cautious application of Article 82 in price discrimination cases that are not covered by exclusionary abuses.