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Reinventing the Postal Sector in an Electronic Age

Reinventing the Postal Sector in an Electronic Age

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

This compilation of original essays by an international cast of economists, regulators and industry practitioners analyzes some of the major issues now facing postal and delivery services throughout the world as competition from information and communication technologies has increased.

Chapter 16: Price Discrimination in the Postal Sector and Competition Law

Damien Geradin

Subjects: economics and finance, public sector economics


* Damien Geradin† 1 INTRODUCTION Price discrimination is pervasive in all sectors of the economy. Businesses, including postal operators, use price discrimination to stimulate demand. Given the downward pressure on mail volumes due to electronic alternatives, postal operators have had to respond rapidly and effectively. Postal operators, for instance, adopt pricing strategies designed to stimulate demand by offering rebates and other forms of price incentives to their business counterparts. This chapter analyzes the extent to which these price discrimination strategies raise competition law issues and, if so, how these issues have been dealt with by competition law authorities and courts. One of the difficulties for competition lawyers and economists is that price discrimination is a polymorphic concept that covers a variety of practices, which are not necessarily apprehended by the same competition rules and principles. For competition lawyers, price discrimination typically covers pricing conduct falling within the scope of Article 102(c) of the Treaty on the Functioning of the European Union (hereafter, TFEU), according to which a dominant firm commits an abuse when it applies ‘dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage’. By offering a more advantageous price to Customer A than Customer B, dominant firm X may thus place Customer B at a competitive disadvantage. When selling at different prices is objectively justified by the fact that customers are ‘differently situated’ (which is often the case), the practice in question does not fall within the purview of Article 102(c)...

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