IDEAS home Printed from https://ideas.repec.org/p/ccp/wpaper/wp08-34.html
   My bibliography  Save this paper

'Consumer' versus 'Customer': the Devil in the Detail

Author

Listed:
  • Pinar Akman

    () (Centre for Competition Policy, University of East Anglia)

Abstract

The ultimate objective of EC competition rules is arguably the enhancement of ‘consumer welfare’. In EC competition law, however, ‘consumer’ merely means ‘customer’. Not being limited to final consumers, the concept also encompasses intermediate customers. Moreover, according to the EC Commission, under Article 82EC, harm to intermediate customers is generally presumed to create harm to consumers and where intermediate customers are not competitors of the dominant undertaking, there is no requisite to assess the effects of conduct on users further downstream. This paper questions the appropriateness of this presumption in light of recent advances in economics, specifically that of vertical restraints and in particular non-linear pricing. It uses this literature to show that there are many instances where an increase (decrease) in ‘customer welfare’ does not cause an increase (decrease) in ‘consumer welfare’. In these cases, the presumption is devoid of economic justification and likely to lead to decisional errors. The paper concludes that if the law is to serve the interests of ‘real’ consumers, the EC Commission should reconsider this presumption and its interpretation of the ‘consumer’ in ‘consumer welfare’. Until then, it remains questionable and objectionable whose interests EC competition law and in particular, Article 82EC, serve.

Suggested Citation

  • Pinar Akman, 2008. "'Consumer' versus 'Customer': the Devil in the Detail," Working Papers 08-34, Centre for Competition Policy, University of East Anglia.
  • Handle: RePEc:ccp:wpaper:wp08-34
    as

    Download full text from publisher

    File URL: http://www.ccp.uea.ac.uk/publicfiles/workingpapers/CCP08-34.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Clay, Karen & Krishnan, Ramayya & Wolff, Eric, 2001. "Prices and Price Dispersion on the Web: Evidence from the Online Book Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(4), pages 521-539, December.
    2. Brian Kahin & Hal R. Varian (ed.), 2000. "Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611597, January.
    3. Joel Waldfogel & Lu Chen, 2003. "Does Information Undermine Brand? Information Intermediary Use and Preference for Branded Web Retailers," NBER Working Papers 9942, National Bureau of Economic Research, Inc.
    4. Haruvy, Ernan & Prasad, Ashutosh, 2005. "Freeware as a competitive deterrent," Information Economics and Policy, Elsevier, vol. 17(4), pages 513-534, October.
    5. Boom, Anette, 2004. ""Download for Free" - When Do Providers of Digital Goods Offer Free Samples?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 70, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    6. J. Miguel Villas-Boas, 2006. "Dynamic Competition with Experience Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 37-66, March.
    7. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    8. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, pages 18-32.
    9. Judith A. Chevalier & Dina Mayzlin, 2003. "The Effect of Word of Mouth on Sales: Online Book Reviews," NBER Working Papers 10148, National Bureau of Economic Research, Inc.
    10. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-1518, November.
    11. Bruno Jullien, 2005. "Two-sided Markets and Electronic Intermediaries," CESifo Economic Studies, CESifo, vol. 51(2-3), pages 233-260.
    12. M. C. Jones, 2006. "Book Review," Journal of Applied Statistics, Taylor & Francis Journals, vol. 33(10), pages 1149-1151.
    13. Sartori, Anne E., 2003. "An Estimator for Some Binary-Outcome Selection Models Without Exclusion Restrictions," Political Analysis, Cambridge University Press, vol. 11(02), pages 111-138, March.
    14. Dirk Bergemann & Juuso Välimäki, 2006. "Dynamic Pricing of New Experience Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 713-743, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Article 82EC; abuse of dominance; consumer welfare; customer welfare; final consumers; intermediate customers;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ccp:wpaper:wp08-34. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cheryl Whittkaer). General contact details of provider: http://edirc.repec.org/data/ccueauk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.