The Paradox of the Exclusion of Exploitative Abuse

Bruce Lyons
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Bruce Lyons: Centre for Competition Policy and School of Economics, University of East Anglia

No 2008-01, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: Monopoly pricing is a textbook market failure that is taught in the first year of any economics course. The implied welfare loss (or 'exploitative abuse') justifies a whole range of competition policy towards cartels, mergers and regulated industries. Yet there is widespread hostility to prosecuting the same exploitative abuse in the textbook monopoly case (i.e. under Article 82EC)! This paper seeks to understand this paradox. I conclude that, while there are important problems with prosecuting Article 82 exploitation cases (because of problems relating to measurement, market dynamics, multi-sided markets and remedy issues), it is important to keep open the possibility of prosecution; for example, in the forthcoming Article 82 Guidelines.

Keywords: exclusionary abuse; exploitative abuse; monopoly pricing; welfare loss (search for similar items in EconPapers)
JEL-codes: D42 I38 L41 (search for similar items in EconPapers)
Date: 2008-12-01
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2008_01

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