Considering the Counterfactual in Predation Cases

Kay Winkler

No 19287, Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation

Abstract: In order to distinguish predatory pricing from competition on the merits, the courts in the United States and in the European Union have established cost-based tests. In contrast, Australia and New Zealand make use of a counterfactual analysis - which has proved controversial when applied in telecommunications cases in New Zealand. The new European effects-based approach advocated by the European Commission entails a counterfactual analysis which is related to the profitability of the conduct. In this presentation it is suggested that such a counterfactual test could be useful in predation cases if it establishes a causal link between the profitability of the conduct and foreclosure effect.

Keywords: Predatory pricing; counter factual analysis (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwcsr:19287

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