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Predatory pricing may be defined as the practice whereby a firm sets its prices at a sufficiently low level with the purpose of eliminating a competitor or preventing the entry of a new one into the market[8]. Predatory pricing usually involves discrimination by a dominant firm between its existing customers and actual or potential customers of rival firms[9]. This may happen where a dominant firm cuts its prices selectively to costumers that might defect to a rival, whereas leaves higher prices to others costumers[10].
Margin squeeze encompasses practices whereby a vertically integrated firm with dominant position on the upstream market for an input, sets its prices at such a level that prevents the downstream rivals to compete with it. In such a situation, “the dominant firm applies a margin squeeze by setting a high price for the input, charging low prices on the downstream market, or by a combination of the two”.[11] Margin squeeze cases involve price discrimination in the sense that a dominant firm discriminates in favour of its own downstream business, to the detriment of rivals.[12]Loyalty (or fidelity) rebates can be described as“pricing structures offering lower prices in return for a buyer’s agreed or de facto commitment to source a large and/or increasing share of his requirements with the discounter”[13]. They grants a financial advantage so as to prevent costumers from obtaining their supplies from competitors[14].
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As has been seen, discrimination can arise in many cases under Article 102 TFEU, given the confusion that has been created by practice and case law.[21]
[8] A. Jones and B. Sufrin, EU Competition Law, 5th edition, 2013, Oxford, p. 401-402
[9]R.O’Donoghue and J.Padilla,The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon, p.245-246
[10]R. Whish and D. Bailey, Competition Law,8th edition, 2015, p. 789-780. See also Irish Sugar v. Commission, Case T-228/97, 1999, ECR II-2969, para 112
[11]A.Jones and B.Sufrin, EU Competition Law, 5th edition, 2013, Oxford, p.426
[12]R.O’Donoghue and J.Padilla, The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon, p.246
[13]See Loyalty and Fidelity Discounts and Rebates, OECD Report of 4 Febr.2003, p.7
[14]Case 85/76, Hoffman-La Roche v. Commission [1979] ECR 461, para 90
[15]A.Jones and B.Sufrin, EU Competition Law, 5th edition,2013, Oxford, p. 510
[16]R.O’Donoghue and J.Padilla, The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon, p.248
[17]Case 27/76, United Brands v Commission, [1978] ECR 207, 14 February 1978, para 183
[18]R.O’Donoghue and J.Padilla, The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon, p.596
[19]Communication from the Commission — Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, (2009/C 45/02), para 49
[20] R.O’Donoghue and J.Padilla, The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon, p.246, A.Jones and B.Sufrin, p.EU Competition Law, 5th edition,2013, Oxford, p. 487
[21]R.O’Donoghue and J.Padilla,The Law and Economics of Article 102 TFEU, 2nd edition, 2013, Oxford and Portland, Oregon p.246
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