Legal and Economic Appraisal of the ‘More Economic Approach’ to Unilateral Exclusionary Conduct: Regulation of Loyalty-Inducing Rebates (Case C-95/04P)

Summary:

This article discusses the European Court of Justice (ECJ) judgment in the British Airways case. The article approaches the topic by first summarising the various phases of the British Airways case in the light of the relevant legal precedents. Thereafter, the main arguments advanced against the European Courts’ pronouncements from a legal viewpoint are assessed. The article suggests that such criticism calls for a dramatic change in the ‘structionalist test’ adopted by the European institutions.

The article goes on to weigh the treatment of exclusionary rebates as shaped by the recent case law against the economic approach set out by the DG Discussion Paper. The focus is on the economic standards suggested therein, alongside their implications and drawbacks.

Finally, assuming a strictly economic viewpoint, the article explores the ‘more economic approach’ both towards retroactive rebates, and, more generally, exclusionary conduct. By bringing into play the insights provided by information economics, behavioural economics, and dynamic economic theories, the article suggests that relevant aspects of the ‘more economic approach’ which should orientate the review process the abuse doctrine is undergoing are far from being uncontroversial.

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