We thank Aleix Calveras and Ricard Flores for their useful comments. Ramon Caminal acknowledges the support of the CREA Barcelona Economics Program and the Spanish MCyT (grant SEC2002-02506).Many economists and policy analysts seem to believe that loyaltyrewarding pricing schemes, like frequent yer programs, tend to reinforce rms market power and hence are detrimental to consumer welfare. The existing academic literature has supported this view to some extent. In contrast, we argue that these programs are business stealing devices that enhance competition, in the sense of generating lower average transaction prices and higher consumer surplus. This result is robust to alternative speci cations of the rms commitment power and demand structures, and is derived in a theoretical model whose main predictions are compatible with the sparse empirical evidence.JEL Classi cation numbers: D43, L13
The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year's article provides first a general presentation of the role of the Chief Competition Economist's team and surveys some of the main achievements of the Directorate General for Competition over 2018/2019. The article then reviews the Siemens/ Alstom merger, the Google Android case, as well as two state aid cases that related to a public service compensation for obligations that involved press delivery in France and Italy. Keywords Antitrust • Competition policy • Mergers • State aid • European champions • Google • Net avoided costs This article provides first an overview of the activity of the Directorate General for Competition of the European Commission (DG Competition) in 2018/2019 that is related to antitrust, mergers, and state aid (Sect. 1). In the following sections, the contribution by the Chief Economist Team (CET) to the economic analysis in
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