Discounting

Question 1

What is Article 102 of the Treaty on the Functioning of the European Union (TFEU)?

Answer 1

Article 102 prohibits the abuse of a dominant position within the internal market.

Question 2

True or False: Article 102 applies only to companies operating within the European Union.

Answer 2

True

Question 3

What does Chapter 2 of the Competition Act 1998 in the UK correspond to in EU law?

Answer 3

Chapter 2 corresponds to Article 102 TFEU regarding the abuse of a dominant position.

Question 4

Fill in the blank: Discounting practices that are predatory may violate ______ law.

Answer 4

competition

Question 5

What is a common form of abusive discounting under Article 102?

Answer 5

Predatory pricing, where a dominant firm sets prices below cost to eliminate competition.

Question 6

Multiple Choice: Which of the following is NOT a factor in determining the legality of discounting practices?

Answer 6

The company’s market share in unrelated markets

Question 7

What is the purpose of discounting in competition law?

Answer 7

To assess whether discounting practices distort competition or harm consumers.

Question 8

True or False: Loyalty discounts can be considered anti-competitive under Article 102.

Answer 8

True

Question 9

What is a key criterion for assessing discounting practices under Chapter 2?

Answer 9

Whether the discounting practices strengthen the dominant position of a firm.

Question 10

Fill in the blank: A firm may be found in violation of Article 102 if its discounting practices have an ______ effect.

Answer 10

anti-competitive

Question 11

What is an example of a legitimate discounting strategy?

Answer 11

Volume discounts that benefit consumers without harming competition.

Question 12

Multiple Choice: Which of the following is a potential consequence of infringing Article 102?

Answer 12

Imposition of fines and requirement to cease the anti-competitive behavior.

Question 13

What must be demonstrated to prove predatory pricing?

Answer 13

That the pricing is below the average variable cost and intended to eliminate competition.

Question 14

True or False: All discounting practices are illegal under EU and UK competition law.

Answer 14

False

Question 15

What is the significance of the term ‘dominant position’ in competition law?

Answer 15

It refers to a firm’s ability to behave independently of competitive pressures.

Question 16

Fill in the blank: The concept of ______ is crucial for understanding whether a company holds a dominant position.

Answer 16

market power

Question 17

What role do market definitions play in assessing discounting practices?

Answer 17

They help determine whether a firm holds a dominant position in a relevant market.

Question 18

Multiple Choice: Which of the following is a common defense used by firms against allegations of abusive discounting?

Answer 18

Claiming that the discounts benefit consumers by lowering prices.

Question 19

What is the relationship between discounting and consumer welfare in competition law?

Answer 19

Discounting can enhance consumer welfare if it promotes competition and lowers prices.

Question 20

True or False: The UK competition law framework mirrors that of the EU after Brexit.

Answer 20

True