European anti-trust restrictions on rebates and discounts by “dominant” companies

Economic Note / June 2007

As consumers, we often benefit from reduced prices, rebates, discounts, reduction coupons and loyalty coupons of various sorts. However, European anti-trust authorities, acting under the pretext of preserving competition, have been moving against these trade practices and price variety – judging them “discriminatory” – especially when applied by “dominant” firms. Contrary to its stated aim, this competition policy penalizes consumers by depriving them of lower prices and better service. Rather than protect competition against an “abuse of dominant position,” it shelters inefficient competitors.