pdf

O’Melveny’s Sallet, Robson Author Corporate Counsel Article on Legal Implications of Loyalty Discounts

June 21, 2013

On June 21, 2013, Corporate Counsel published the latest in a series of columns by O’Melveny & Myers attorneys focused on key legal issues specific to a variety of US industries.  This edition, titled “The Law of Loyalty Discounts: Two and a Half Theories,” was co-authored by O’Melveny partner Jon Sallet and counsel Katrina Robson.  In the article, Sallet and Robson write that “loyalty discounts are ubiquitous in commercial arrangements, but their treatment under the law is still uncertain.  Avoiding uncertainty is the obvious solution; a company offering only volume discounts, for instance, is unlikely to face antitrust questions.”

Yet when the issue must be confronted directly, the authors argue, “in-house counsel should (i) carefully evaluate the potential net effect of discounts on competition, should they ever be assessed under a rule-of-reason analysis, and (ii) recognize that the federal judiciary’s willingness to consider the aggregate impact of the alleged acts of a monopolist… requires a careful evaluation of all circumstances, not just the impact of pricing alone.”

Sallet is a member of O’Melveny’s Antitrust and Competition, and Integrated Legal Strategies Practices.  Robson is a member of the Class Action and Mass Torts, and Antitrust and Competition Practices.  They both reside in the Firm’s Washington, DC office.