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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 259.65+2.3%Jan 23 9:30 AM EST
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To: fastpathguru who wrote (237884)7/31/2007 5:33:50 PM
From: WindsockRead Replies (2) of 275872
 
Above cost loyalty discounts in a single product setting -- such as those used by Intel – are viewed as a pro-consumer form of price competition.

Bundled loyalty discounts involving multiple markets sometimes are viewed as anti-competitive depending on the facts. The LePage’s and SmithKline cases involved bundled multiproduct discounts.

law.gmu.edu

See Page 2

“Recent scholarship and U.S. case law have focused on whether loyalty discounts can serve as an exclusionary device that would violate Section 2 of the Sherman Act.6 In addition, firms’ use of loyalty discounts in the distribution of their products has also been attacked as unlawful primary line price discrimination under the Robinson Patman Act.7 In the U.S. federal courts, use of above cost loyalty discounts in the single product setting generally has been viewed as a pro-consumer form of price competition, and antitrust challenges to such programs have not been successful.8 Antitrust challenges to above cost loyalty programs involving multiple markets, however, have met with greater success. In two cases, LePage’s v 3M and SmithKline v Eli Lilly, the Third Circuit Court of Appeals has upheld jury verdicts condemning the use of loyalty discounts under Section 2 of the Sherman act that involved bundled multiproduct rebates.9”
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