 THE MORE ECONOMIC APPROACH TO PREDATORY PRICINGMichael Funk and Christian Jaag Journal of Competition Law and Economics, 2018, vol. 14, issue 2, 292-310 Abstract: The “more economic approach” was introduced to antitrust to achieve a more effect-based and theoretically grounded enforcement. However, related to predatory pricing it resulted in systematic over- and under-enforcement: Economic theory does not require dominance for predation to be a rational (and harmful) strategy, although an ex ante dominant firm would often refrain from predation. Hence, within the current legal framework which requires dominance for antitrust to apply, a more effect-based and theoretically grounded antitrust enforcement cannot pursue harmful predation. Therefore, we suggest separating predatory pricing from exclusionary abuse of a dominant firm, both legally and analytically. Instead, predatory pricing should be analyzed along the same logic as a merger. In particular, we argue that three elements from merger control should be adopted: in the absence of dominance, market share and/or turnover thresholds may serve as a de minimis rule; recoupment should be analyzed similar to the competitive effect of a merger between the predator and its prey; and a stronger efficiency defense should be established. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:14:y:2018:i:2:p:292-310. 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 |
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