Specific guidelines have been issued by the Commission for the Protection of Competition to ensure that certain types of in-kind rebate comply with competition laws.
The new guidelines apply to non-cash rebates in the form of complementary goods or services in vertical commercial transactions.
These guidelines complement the general guidelines on unfair competition practices such as offering customers gifts or prizes that require them to buy the offeror's products or services.
The rationale behind the general guidelines is that consumers should choose between competing products based on their characteristics. Incentivising them to purchase a product or service by offering them a free gift or subsidised item is regarded as anticompetitive undue influence. However, the general statutory prohibition does not apply when the offers are:
- promotional materials of insignificant value bearing a clear indication or marking of the advertiser
- products or services, which by their nature or commercial practice are supplementary to the main products and services sold
- products or services offered as rebates in cases where those products or services are being sold in large quantities
The CPC has found numerous instances of products or services being offered as in-kind rebates where different products or services are being sold in large quantities and states now that, in future, this will be treated as a violation of the competition rules.
Law: Article 36, paras. 2 and 3 of the Protection of Competition Act of 2009
