This summary on price discrimination in European Economic Area (EEA) countries is for educational purposes, and is not meant to be legal advice.
In the EEA, antitrust laws do not generally prohibit price discrimination or discounts, unless there is an abuse of a dominant position. It is an abuse for a company in a dominant position to apply dissimilar conditions to equivalent transactions, thereby placing some parties at a competitive disadvantage.
A company that is determined to be dominant, may not engage in price discrimination or discounts, but may charge different prices to pass savings on to its customers by giving objectively fixed rebates, such as volume rebates, for increases in efficiency and for reduced administrative costs. The rebates must not be given to reward customer loyalty or customer promotional efforts.
Competitive upgrade programs have been held by European case law not to be considered customer loyalty rewards when offered by enterprises in dominant positions. Such programs may be discriminatory because only customers who switch from a competitor’s products are granted the rebates. Such conduct may be an abuse because it forces customers to buy less of the competitor’s products.
In France, if a company holds a dominant position in the relevant market, competitive upgrade programs may be regarded as an abuse. However, when a company is not in a dominant position, practices that result in offering a product, to a certain customer category, but not to all customers, at the same price, do not constitute a discriminatory or unfair competition practice as long as every similarly situated customer is entitled to the same price, and a competitor’s commercial success is not used to promote the product.
Example of what is not considered an unfair competition practice in France: Company offers a lump-sum to customers who terminate their licenses to old versions of competitive products when the customers purchase licenses to Company’s products.
In the United Kingdom, absent a dominant position, competitive upgrade programs are allowed as long as any discounts offered are not conditioned on the purchase of tied products.
In Germany, absent a dominant position, competitive upgrade programs are allowed. Under German law, a company is presumed to be in a dominant position if it has a market share of at least a third of the sales in the relevant market. Generally, it is not considered an unfair practice for a company in Germany to offer products to customers at different prices, unless the price discrimination is intended to drive certain competitors out of the market.
In Italy, absent a dominant position, competitive upgrade programs are allowed as long as the goal is not to drive a competitor from the market or is a form of predatory pricing. The intent of eliminating competitors from the market is presumed if competitive upgrade programs are offered systematically, as opposed to an occasional campaign for promotional purposes or the launch of a new product.
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