In June 2019 Beta launched an improved version of its 4Gcompliant baseband chipset allowing for even faster transmissions of data. Key customers in the market expressed particular interest in these baseband chipsets and some decided to switch from Alpha to Beta. Upon hearing this news, in December 2019 Alpha took the following steps:
(a) First, it offered a 15% discount to its existing customers that will increase their purchase of Alpha 4G-compliant baseband chipsets by 10% in comparison to the preceding year, to be applied to the totality of purchases, once the target has been reached.
(b) Second, it dramatically lowered the prices of its 4Gcompliant baseband chipsets to its former customers who switched to Beta in the last six months.
In January 2020 Beta complained to the European Commission that Alpha’s conduct was aimed to prevent Beta from expanding and building its market presence and was a violation of Article 102 TFEU. Alpha dismissed the claim, arguing that its new policies simply reflected cost savings and were intended to strengthen its relationships with its customers, while Alpha concentrates its efforts on developing 5G-compliant baseband chipsets amidst ongoing preparations for the complete roll out of 5G in several countries around the world.
In February 2020, the European Commission decided to initiate an investigation into Alpha’s conduct. You have been recently hired as a lawyer at DG Competition and you have been asked to prepare a preliminary report evaluating whether Alpha’s practices under (a) AND (b) are in breach of Article 102 TFEU. Where there is insufficient information provided, explain what extra information you would like to see and why this might help you to write your report.