Analysis of loyalty rebates

Granting discounts and rebates is a deeply-rooted element of economic life and one of the most spread practices among dealers to attract customers. Rebates are refunds paid by the supplier after the purchasing in order to induce loyalty to buyers, generally seen as efficient tools for reducing price levels. Challenges arise whilst these instruments, clearly accepted for relaxing inter brand competition, are exploited by firms already dominant in the reference market in order to soften competition levels within the industry. Competition law authorities have the duty of supervising and guaranteeing the effective running of fair competition dynamics. Over time, the European Directorate General for Competition has emerged for a noteworthy approach towards discount schemes stemmed from conservatism and incapable of defining a tradeoff line between potentially illegal abuses and pro-competitive qualities of rebate procedures. The main goal of the dissertation will be analyzing discounting dynamics from industrial economics and legal viewpoints, leveraging on the evolution of European Commission and Courts’ methodologies built case-by-case until today.