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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”.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.
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”. They grants grant a financial advantage so as to prevent costumers from obtaining their supplies from competitors.
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