The rebates, which consist in granting a lump sum discount to the ...

to capture. Then it compares these two elements to assess whether the required share exceeds thecommercially viable share: if it does, it would mean that the rebate system would likely to have theforeclosure effect on the market. This is because it would be equivalent to say that the effectiveprice applied by the dominant company is below the average total cost of the dominant company.However, even in case a cost based test is applied to one of the most complex type of rebate such asloyalty rebates, the positive finding regarding the likeliness of the foreclosure will not be sufficientto state confidently that there is an abuse of dominant position by the dominant company.Assessing the likeliness of the foreclosure of the rebate scheme, will not lead automatically toassess the market distorting foreclosure effect induced by that rebate scheme. It can be shown that arebate failing to pass “safe harbour” test alone cannot confirm any of the charges against thedominant company with regards to the rebate applied unless it is complemented by evidenceconfirming the fact-based story of harm to competition and consumers identified at the beginning ofthe case.This can be demonstrated through the case of a dominant company whose effective prices derivingfrom loyalty rebate scheme result to be under the relevant cost measure of one of the “safe harbour”tests already described. In this case, in order to assess the dominance abuse it would also benecessary to demonstrate the absence of the evidence regarding absence of a foreclosure effect. Forinstance, if in presence of a rebate scheme likely to induce foreclosure, there is also significant entryfrom other companies or expansion by the existent competitors in the market then it would not bepossible for competition authorities to conclude that there is a market distortion depending on therebate scheme. In other words, in presence of some important evidence which contradicts whatforeseen by the harm to competition story, the abuse of dominant position cannot be confirmed.On the other hand, in case the effective prices of the dominant company are found to be above therelevant cost measure, from an economic point of view, the conclusion would be no abuse ofdominant position. However, DG Competition Discussion Paper states that there can be someextreme cases where market conditions would allow the dominant company to exclude the entrantsthat would increase competition, even if the effective price is above the relevant cost measure. So inthese cases before clearing the abuse case, it could be necessary to analyse further the case in thelight of the exceptional market conditions described in the harm to competition story.21