USA : A Quick Look at the Legal Standards for Loyalty Discounts

At present, in the United States no final word has been spoken as to the law on loyalty discounts. On the one hand, many U.S. courts assess loyalty discounts under the predatory pricing test, which is a defendant-friendly and easy-to-administer test that saves every discount above a certain measure of costs. On the other hand, other courts assess loyalty discounts by using the rule of reason and, namely, the substantial amount of foreclosure test which is proper of the law of exclusive dealing and which allows forbidding also above-cost prices. More recently, in 2016, the Third Circuit wrote that the predatory pricing test may be utilized as a “specific application of the rule of reason" only when “price is the clearly predominant mechanism of exclusion”. Nevertheless, in Eisai the very same court modified its approach. In summary, as to loyalty discounts, everything under the U.S. heaven is in utter chaos