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Research On Antitrust Law Regulation Of Loyalty Discount Behavior

Posted on:2020-11-16Degree:MasterType:Thesis
Country:ChinaCandidate:L JiangFull Text:PDF
GTID:2416330590471220Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Loyalty discount refers to the price concessions that can be enjoyed when the buyer's purchase volume or share reaches the pre-set threshold of the seller during a specific reference period.As a common business behavior,loyalty discount can be seen everywhere in life.It has many forms,such as discount,rebate,allowance,bonus and so on.In general,loyalty discounts are beneficial to both producers and consumers.For producers,loyalty discount can not only increase sales and profits and expand production scale,but also solve the coordination problem in the production chain.For consumers,loyalty discount reduces commodity prices and increases consumer welfare.However,the behavior may also lock in customers,increase consumer switching costs,and pose a potential threat to competition.In general,when dominant enterprises maintain or strengthen market power and exclude competitors through loyalty discounts,it will be illegal and will be regulated by the Anti-monopoly Law.It is the dual nature of loyalty discount that makes it one of the controversial topics.However,there are no specific provisions about loyalty discount in the existing normative documents in China.Article 17 of the Anti-Monopoly Law in China,which came into effect in 2008,stipulates six kinds of abuse of market dominance,including predatory pricing,exclusive dealings,price discrimination,etc.Meanwhile,"other abuses of market dominance" is used as the general clause.Loyalty discount is also an abuse,so it can be considered that the Anti-monopoly Law has covered such behavior.At the end of 2010,the National Development and Reform Commission(NDRC)issued the Anti-Price Monopoly Regulations and the State Administration of Industry and Commerce(SAIC)issued the Regulations on Prohibiting Abuse of Market Dominance,which stipulated price discounts,but lacked operability.In 2019,the State Administration for Market Regulation issued the Regulations on Prohibiting Abuse of Market Dominance(Draft for Opinions),which unified the relevant rules of abuse and referred to the issue of quantity discount,but the definition of loyalty discount is still vague.In November 2016,the SAIC first mentioned loyalty discount in the Tetra Pak case,which was defined as "other abuses of market dominance" stipulated in Article 17 of the Anti-monopoly Law,and analyzed its competitive effect in detail.However,after a detailed analysis of the case,we can find that there are still some problems in the determination of the SAIC,such as the inconsistency of the principles and the non-standardization of the methods of identification.Moreover,China is a statutory law country,so the guiding role of cases is very limited.Relatively speaking,the research on loyalty discount in European Union(EU)and the United States of America(USA)is more perfect.There are specific provisions for loyalty discounts in the Guidance on the Commission's Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings formulated by the European Commission.The practice experience of the Commission and the courts at all levels of the EU is also relatively rich.There have been famous cases such as Michelin case and Intel case.The review of loyalty discount in the United States is mainly based on case law.There are Brooke case,Eisai case and other typical cases.After decades of research and development,EU and USA have established a relatively advanced review mechanism,with rich experience in law enforcement and judicature,which can be used for reference to improve the regulation of loyalty discounts in China's anti-monopoly law.This paper consists of five parts.The first part describes the basic theory of loyalty discount behavior,including concept,constitutive requirements,classification and the relationship with other abuses.The second part analyses the competitive effect of loyalty discount,pointing out that it has both the side of pro-competition and the side of anti-competition,but the focus of this chapter is to analyze the anti-competitive effect of loyalty discount.In the third part,the illegal identification process of loyalty discount is analyzed with the case of Tetra Pak.In determining whether loyalty discounts violate the Antitrust Law,we should first define the relevant commodity markets and geographical markets,and then analyze whether the enterprises involved in the case have dominant position in the relevant markets.If they have dominant position,we should point out the types of loyalty discounts they implement,analyze their competitive impact and also consider whether there are legitimate reasons.The fourth part is about the experience of EU and USA in regulating loyalty discounts.Starting from classical cases,this paper expounds the principles,methods,defenses and safe harbor system to the review of loyalty discounts in EU and USA and makes a comparative analysis,and also puts forward some enlightenments for China.The last part analyses the current situation and problems of China's regulation of loyalty discount.Based on the experience of EU and USA,it puts forward some suggestions to improve the anti-monopoly law regulation of loyalty discount in China.
Keywords/Search Tags:loyalty discount behavior, Antimonopoly law, abuse, market dominance
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