Study on Loyalty Rebates

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"The French Competition Authority (“FCA”) decided to launch a bilingual collection of thematic studies. It is designed for competition law practitioners, as well as for economic stakeholders, professors and business, economic and competition law students. Topics will be either transversal (on a legal, economic concept or on proceedings) or sectoral. The goal is to summarize the decision-making practice of the Autorité as well as the case-law of the French and European courts in order for the reader to understand every aspect of the subject at hand.

The first issue has been dedicated to loyalty rebates. Loyalty rebates are a very common practice among companies. They also represent one of the trickiest areas of competition law. The past decade has seen a very active debate on loyalty rebates, linked with the publication of the communication by the European Commission regarding its guidance on its priorities in terms of abuse of dominant position and case-law of the European courts. The successive « Intel » judgment especially raised extensive debate on the way these rebates can be analyzed in competition law.

The Autorité de la concurrence issued decisions on several occasions regarding loyalty rebate practices, which took varied forms. Throughout these cases, the decision-making practice illustrated the great diversity of rebate practices and was able to define its framework and analysis methods. In this context, the Autorité provides with this work a complete overview, to enumerate and explain the different potential effects of fidelity rebates, define their legal and economic analysis framework and to help the companies to develop rebate systems in compliance with competition rules.

This work is designed and aimed at competition specialists (lawyer, economists) but also for companies, to help managers make well-informed decisions regarding their policy towards loyalty rebates, based on a sound competition analysis."