SAA II: Abuse of Dominance in the South African Skies
Journal of Competition Law and Economics, Forthcoming
26 Pages Posted: 29 Jul 2012 Last revised: 14 Dec 2016
Date Written: January 31, 2013
This article reviews a recent abuse of dominance decision against the incumbent domestic airline in South Africa (SAA). This case placed significant emphasis on the economic impact of the abusive conduct, and it represents a clear example of the adoption of an effects-based approach to assess exclusionary behavior by a dominant firm. As this paper sets out, given the features of SAA’s conduct and of the relevant market context, it is also possible to identify a coherent economic framework which can explain why SAA’s rivals could not profitably match its incentive schemes and were therefore foreclosed. The conceptual issues raised by the SAA case are similar to the ones at stake in the landmark judgments on British Airways. The lessons from this case are therefore relevant to ongoing antitrust debate on loyalty discounts.
Keywords: abuse of dominance, loyalty schemes, foreclosure
JEL Classification: L41
Suggested Citation: Suggested Citation