Abstract/Summary

This thesis examines the treatment of fidelity 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 anti-competitive effects, as the same type of rebates could be pro-competitive or anti-competitive depending on their effects on competition. Regardless of their ambiguous effect, the EU Courts deemed fidelity rebates as an unlawful abuse of a dominant position. Many have questioned the strict approach adopted by the EU Court over the years. As a reaction, the European Commission undertook a modernisation of the EU competition law regime, pressing for the adoption of an ‘effects-based’ approach based on careful examination of a company’s behaviour and an application of an ‘as efficient competitor’ (AEC) test in order to distinguish between anti-competitive conduct and legitimate competition. In recent years, the application of the AEC test in relation to the anti-competitive effects of fidelity rebates has been raised as a central issue in the Intel and the Post Danmark II judgements. Both judgements failed to clarify whether the test should be a part of the legal standard and highlighted the uncertain doctrine in this area, leading to a renewed debate on the appropriate legal standard to distinguish lawful from exclusionary fidelity rebates. To that extent, the case law of the EU Courts and the economic theory of rebates is explored in order to provide an interpretation of the law and to clarify the appropriate treatment of fidelity rebates. The critical discussion of the case law is centred on the idea as to whether the standard needs to reflect economic analysis and particularly, the AEC test. The recent US case law regarding fidelity rebates is also studied in order to provide clarity on this question. This thesis demonstrates that the application of a pricecost test as a tool to distinguish anti-competitive from pro-competitive fidelity rebates cannot be based on the current state of both US and EU case law and of the modern economic literature.