Michael Funk and Christian Jaag ‘The More Economic Approach to Predatory Pricing’ (2018) Journal of Competition Law & Economics 14(2) 292

This paper, available here, argues that legal requirements and economic reasoning are not aligned as regards predatory pricing. Predation is not a strategy predominately used by ex ante dominant firms, but rather a strategy to gain ex post dominance. Consequently, the current legal practice in Europe and other jurisdictions, which requires ex ante dominance to pursue predatory pricing, makes the prosecution of predatory pricing virtually impossible because it overlooks the basic economic rationale for predatory pricing. This inconsistency has become even more severe because the adoption of a “more economic approach”: in fact, the more accurate the economic assessment is, the less probable is a conviction of harmful predation under the current legal framework. The authors suggest prohibiting predatory pricing independently from other exclusionary abuses. Instead, predatory pricing should be subject to the same analytical framework as mergers, where a similar economic and business logic applies. Since recoupment of predation is akin to the unilateral effects arising from the merger…

Miroslava Marinova ‘What Can We Learn About the Application of the as Efficient Competitor Test in Fidelity Rebate Cases from the Recent US Case Law?’ (2018) World Competition 41(4) 523

The treatment of fidelity rebates is one of the most difficult and controversial topics in EU competition law and US antitrust law. Unlike in the EU, where a number of fidelity rebates are deemed abusive without the need to engage in detailed economic analysis, in the US it is consensual that rebates should be subject to an effects-based analysis. Nonetheless, the legal assessment of fidelity rebates in the US remains controversial. Some courts have adopted an exclusive dealing framework, while others have used price-cost tests; others still have applied a mix of the two frameworks. This diversity of approaches has led to intense academic debate in US scholarship, which finds a parallel in debates regarding whether the appropriate approach to fidelity rebates should be based on predation or on a raising rivals’ cost (RRC) framework. This paper, available here, compares the EU and US approaches to fidelity rebates, and seeks to draw lessons from the US experience and apply them…

Pietro Crocioni ‘On the Relevant Cost Standard for Price-Cost Tests in Abuses of Dominance’ (2018) Journal of Competition Law & Economics 14(2) 26

This article, available here, reviews the use of cost standards in selected European abuse of dominance cases. It shows that a variety of cost standards were employed until recently, and criticises the ECJ’s case law for ignoring challenges with identifying the appropriate cost standard for each case. To address such challenges, it is important to identify the key questions a price–cost test should answer, and agree on the features of such a test. The paper is structured as follows: Section II summarises current knowledge on price-cost tests. This knowledge is outlined in the European Commission’s Article 102 Enforcement Guidance, which puts forward two widely accepted concepts: Average Avoidable Cost (AAC) and Long Range Average Incremental Costs (LRAIC). These tests provide the benchmarks for predatory behaviour in Europe. There is a legal (but rebuttable) presumption that prices below AAC anticompetitively foreclose competition; that prices above LRAIC do not to raise concerns; and that prices between AAC and LRAIC require consideration of…