Antitrust and Regulation, Complements or Substitutes? The Case of a Vertically Integrated Firm

Aldo Gonzalez ()

Working Papers from University of Chile, Department of Economics

Abstract: This paper studies the interaction between regulation and antitrust. We consider a situation where an incumbent provides access to an essential facility and competes downstream with an entrant such that the anticompetitive danger is twofold. First, abusive access charges reduce the benefits of competition and second the incumbent may engage in predatory pricing or “margin squeeze”. We show that access regulation and antitrust are complementary instruments, i.e. tighter ex-ante regulation that tends to fix lower access charge demands ex-post more antitrust monitoring aimed to deter predation.

Keywords: Competition Policy; Predation; Essential Facility; Access Charge. (search for similar items in EconPapers)
Date: 2006-11
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