Discriminatory abuse

Undue discrimination by a business holding a dominant position can be an abuse under Article 82, the Competition Act 1998 and similar legislation.

Discriminatory abuse is one of the three main categories of abuse of a dominant position, alongside exclusionary abuse and exploitative abuse.

*Franck Latrémolière

*Nicholas Francis

We are familiar with the economic arguments raised about discrimination and its effects on competition and welfare, and with the case law on discriminatory abuse. Our approach to using economics ensures that we distinguish these two categories of knowledge. We can draw on economic theory where appropriate without allowing views about economic efficiency or fairness to colour unduly our advice as to the application of the prohibition on discriminatory abuse.

We take particular care to distinguish claims of discriminatory abuse from other forms of abuse that might be claimed on the same facts. For example, a discount structure offered by a dominant supplier to retailers can be both discriminatory (e.g. as against types of retailers who are unduly denied higher rates of discount) and exclusionary (e.g. as against potential competitors, if fidelity-inducing discounts are offered to retailers).

We also understand the boundaries between discriminatory abuse and other possible forms of abuse which are superficially similar but in fact rest on different facts, for example an exclusionary margin squeeze achieved by favouring in-house operations in a vertically integrated company, or the exploitative abuse of certain categories of final consumers.

Making these distinctions clear and explicit ensures that our analysis is rigorous, that any claims or rebuttals of claims are precisely expressed, that differences in the nature of the evidence necessary to establish or rebut evidence for different abuses is clear, and therefore that cases can be analysed and debated quickly and efficiently.

Our analysis of an allegation of discriminatory abuse would be focused on whether the conduct complained of amounts to discrimination between different customers or suppliers (as opposed to the differential treatment of in-house and third party operations), and that it is capable of placing someone at a competitive disadvantage to its competitors (as opposed to being limited to a non-competitive disadvantage, e.g. if discrimination is between final consumers).

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