Michelin welcomes the European Commission’s will to correct its controversial application of Article 82 EC, but regrets its over-regulation-triggered lack of immediate improvement for dominant companies

This article is part of a Chronicle. See more from this Chronicle

Laurent Geelhand, Johanne Peyre, Jun 10, 2008

The European Commission has long rendered famous the name of Michelin to antitrust practitioners by condemning its rebate system. Such decision is part of a case law that followed a surprisingly tough evolution, from condemning exclusive quantitative rebates, to standardized rebates not related to justified economies of scale, leading to a “per se” prohibition. Yet, we consider that applying a “per se” reasoning to regulate abusive conducts is not in line with economic reality, for there cannot be any “per se” abusive conduct. Any assessment of the alleged abusive nature of a practice requires an assessment on a case-by-case basis, notably taking into account the structure of the relevant market. This is particularly the case with rebates which, by definition, seek to benefit the distributor and, ultimately, the consumer, with low prices. We note that, paradoxically, it is precisely in the very same area of rebates that the case law applies a “per se” approach. Such a method of “per se” prohibition is inappropriate and results in particularly harsh decisions, lacking economic sense. The numbers speak for themselves: the rebates issue has given rise to the largest number of negative decisions by the European Commission.

 

Links to Full Content

 

ACCESS TO THIS ARTICLE IS RESTRICTED TO SUBSCRIBERS

Please sign in or join us
to access premium content!