Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/125793
Authors: 
Gaudin, Germain
Mantzari, Despoina
Year of Publication: 
2016
Series/Report no.: 
DICE Discussion Paper 207
Abstract: 
We provide a new legal perspective for the antitrust analysis of margin squeeze conducts. Building on recent economic analysis, we explain why margin squeeze conducts should solely be evaluated under adjusted predatory pricing standards. The adjustment corresponds to an increase in the cost benchmark used in the predatory pricing test by including opportunity costs due to missed upstream sales. This can reduce both the risks of false-positives and false-negatives in margin squeeze cases. We justify this approach by explaining why classic arguments against above-cost predatory pricing typically do not hold in vertical structures where margin squeezes take place and by presenting case law evidence supporting this adjustment. Our approach can help to reconcile the divergent US and EU antitrust stances on margin squeeze.
Subjects: 
Margin squeeze
Predatory pricing
Price-cost test
Abuse of dominance
JEL: 
K21
L12
L43
ISBN: 
978-3-86304-206-6
Document Type: 
Working Paper

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