1. Post Danmark II in context
Pablo Ibanez Colomo London School of Economics

2. Summary Post Danmark II and prior case law
Implications for Article 102 TFEU
Open questions

3. Post Danmark II and prior case law
The analysis in Post Danmark II departs from prior case law in two majors respects
Shift in the focus of analysis: from customers’ behaviour to effects on the competitive process
Exclusionary effects are not merely assumed (capability): their likelihood is to be established

4. Establishing the effects of rebates
Customers’ behaviour
Is the scheme ‘loyalty-inducing’?
Competitive process
Impact on rivals’ ability and incentive to compete?
Consumer welfare
Does the exclusion of rivals harm consumers?

5. The world of Michelin II
A standardised rebate scheme was found to be abusive in Michelin II
The fact that it was loyalty-inducing was sufficient to establish a prima facie breach
Relevant questions in Michelin II (GC ruling)
Retroactive (‘all-unit’) scheme
Reference period of one year
Significant variation in the discount rates

6. The world of Michelin II
‘95. It follows from all of the foregoing that a quantity rebate system in which there is a significant variation in the discount rates between the lower and higher steps, which has a reference period of one year and in which the discount is fixed on the basis of total turnover achieved during the reference period, has the characteristics of a loyalty-inducing discount system’. Case T-203/01, Michelin II

7. The world of Michelin II
In the world of Michelin II, the exclusionary effects of the scheme need not be shown
‘Loyalty-inducing’ schemes are deemed to have an anticompetitive object (para 241)
Such practices are assumed to be ‘capable’ of having exclusionary effects
The absence of exclusionary effects is not a valid defence
The firm can only escape the prohibition by advancing an objective justification

8. The world of Michelin II
Customers’ behaviour
Is the scheme ‘loyalty-inducing?
Competitive process
Impact on rivals’ ability and incentive to compete?
Consumer welfare
Does the exclusion of rivals harm consumers?

9. The world of Post Danmark II
The Court proposes a two-step test in Post Danmark II (paras 29-30)
Assess the nature and the operation of the scheme (paras 31-38)
Examine the likely exclusionary effects of the scheme (paras 39-46)
Showing that the scheme is ‘loyalty-inducing’ is not sufficient to establish an abuse
The exclusionary effects are not merely assumed; likelihood must be established

10. The world of Post Danmark II
The likely exclusionary effects of the scheme are established in light of:
Extent of the dominant position (para 39)
Is the dominant firm an unavoidable trading partner? (paras 35 and 40)
Regulatory barriers to entry (para 40)
Coverage of the practice (para 46)
An objective justification may be advanced once exclusionary effects are established

11. The world of Post Danmark II
‘46. However, the fact that a rebate scheme, such as that at issue in the main proceedings, covers the majority of customers on the market may constitute a useful indication as to the extent of that practice and its impact on the market, which may bear out the likelihood of an anti-competitive exclusionary effect’. Case C-23/14, Post Danmark II

12. The world of Post Danmark II
Customers’ behaviour
Is the scheme ‘loyalty-inducing?
Competitive process
Impact on rivals’ ability and incentive to compete?
Consumer welfare
Does the exclusion of rivals harm consumers?

13. Summary Post Danmark II and prior case law
Implications for Article 102 TFEU
Open questions

14. Implications for Article 102 TFEU
Post Danmark II confirms that the object/effect divide exists in Article 102 TFEU
Some practices are deemed abusive by their very nature (‘by object’)
Evidence of exclusionary effects is not required
The practice is assumed to be ‘capable’ of having such effects
Other practices are only abusive where they are likely to have exclusionary effects

15. Implications for Article 102 TFEU
‘By object’ abuses
‘By effect’ abuses
Pricing below AVC
Refusal to deal
Exclusive dealing
‘Margin squeeze’
Loyalty rebates
Standardised rebates
Tying
Selective price cuts

16. Implications for Article 102 TFEU
Post Danmark II provides insights about the assessment of ‘by effect’ practices
The approach seems very much in line with the logic of the Commission Guidance…
Threshold of effects: likelihood of foreclosure
Criteria to assess the exclusionary effects of the practice
…except for the perpetuation of the ‘by object’ category for some practices (para 27)

17. Summary Post Danmark II and prior case law
Implications for Article 102 TFEU
Open questions

18. Open questions
Is there a reason not to extend Post Danmark II to target rebate schemes?
Schemes based on individualised targets may be more conducive to foreclosure
But:
Would it be enough to claim that the scheme is ‘loyalty-inducing’, as in British Airways?
After Post Danmark II, exclusionary effects are not to be assumed, they have to be established (2-step test)

19. Open questions
Is it justified to prohibit exclusivity and loyalty rebates ‘by object’ after Post Danmark II?
There are, in theory, two reasons why this would be justified
Argument 1: it is safe to presume that exclusivity and loyalty rebates serve an exclusionary purpose
Argument 2: Exclusivity and loyalty rebates can have exclusionary effects

20. Open questions
Is it safe to presume that exclusivity and loyalty rebates serve an exclusionary purpose?
These practices are plausibly pro-competitive (unlike cartels)
This point is not disputed. See:
Case law (e.g. Delimitis, BPB, Van den Bergh Foods, Intel)
Commission Guidance on Article 102 TFEU (paras 34 and 37)
Commission Guidelines on vertical restraints (paras 107 and 146)
After Post Danmark II: is it enough to claim that these practices are potentially exclusionary?