Loyalty Discounts and the FTC's Lawsuit Against Intel

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Loyalty discounts pervade our economy, but may expose unsuspecting businesses to antitrust liability. This paper explains that the antitrust law governing these discounts is unclear, confusing, and constantly changing. The structure of the loyalty discount will determine how a court is likely to analyze it, choosing from one or more of the following frameworks: predatory pricing, leveraging, and foreclosure. The Federal Trade Commission's recent lawsuit against Intel (now settled) made the landscape for businesses even less certain by advancing theories under both Section 5 of the FTC Act and Section 2 of the Sherman Act that are not supported by existing antitrust law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jarod Bona, Bona Law PC | Attorney Advertising

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