Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Baer discusses how workshop will help understanding of conditional pricing practices, (Jun 23, 2014)

By Linda O’Brien, J.D., LL.M.

Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division, discussed how the Department’s workshops serve to illuminate challenging antitrust issues and enforcement efforts, in remarks today at the opening of the Justice Department and FTC joint public workshop on conditional pricing practices in Washington, D.C.

Baer began his address by noting that conditional pricing practices, such as loyalty and bundled pricing, are common throughout the economy. They appear in many forms and across industries. There is vigorous debate among economists and lawyers about the competitive effects of these practices and the appropriate legal analysis. Courts analyzing loyalty and bundled pricing have generated different and sometimes conflicting tests for finding liability. In many instances, conditional pricing practices save consumers money. Many consumers benefit from loyalty and bundled pricing in the retail setting. Others probably have taken advantage of bundled pricing at fast food restaurants, where purchasing a hamburger, fries, and a soda as a meal is cheaper than buying the items separately. These are not the types of conditional pricing that the Department is concerned about, according to Baer.

Concerns can arise when a monopolist uses loyalty or bundled pricing to restrict competition and maintain its market power within a supply chain. Unfortunately, it is not always easy to draw the line between pricing practices that injure competition and those that do not. The Department wants to be careful when drawing that line so not to discourage legitimate discounts that benefit consumers and to ensure that its approach protects competition, not individual competitors, Baer noted.

Businesses need clarity in this area so they can confidently offer discounts that save consumers money. The workshop includes a set of panelists and presenters to help the Department and FTC advance a knowledge and understanding of these practices, Baer concluded.

News: Antitrust AntitrustDivisionNews