MARGIN SQUEEZE: AN ABOVE-COST PREDATORY PRICING APPROACH

Germain Gaudin and Despoina Mantzari

Journal of Competition Law and Economics, 2016, vol. 12, issue 1, 151-179

Abstract: We provide a new legal perspective for the antitrust analysis of margin squeeze conducts. Building on recent economic analysis, we explain why margin squeeze conducts should solely be evaluated under adjusted predatory pricing standards. The adjustment corresponds to an increase in the cost benchmark used in the predatory pricing test by including opportunity costs due to missed upstream sales. This can reduce both the risks of false positives and false negatives in margin squeeze cases. We justify this approach by explaining why classic arguments against above-cost predatory pricing typically do not hold in vertical structures where margin squeezes take place and by presenting case law evidence supporting this adjustment. Our approach can help to reconcile the divergent U.S. and EU antitrust stances on margin squeeze.

JEL-codes: K21 L12 L43 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1093/joclec/nhv042 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: MARGIN SQUEEZE: AN ABOVE-COST PREDATORY PRICING APPROACH (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:12:y:2016:i:1:p:151-179.

Access Statistics for this article

Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

More articles in Journal of Competition Law and Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().