Gianluca Faella

Above-Cost Predation: Reflections on the EU Aapproach under an Economic and Comparative Perspective

  • Abstract

Informations and abstract

Keywords: antitrust, unilateral conduct, abuse of dominance, predatory pricing, abovecost predation

While US case law on predatory pricing requires the proof of prices below an appropriate measure of costs, jointly with the existence of a dangerous probability of recouping the investment in below-cost prices, in Europe above-cost pricing may still give rise to antitrust liability when the dominant firm offers selective price reductions, or implements an aggressive pricing policy by exploiting competitive advantages that rivals cannot (yet) replicate. Under EU competition law, selective discounts constitute a recognized form of possible anticompetitive conduct, although the rationale for antitrust intervention is unclear. On the other hand, the application of principles on predatory pricing in order to remedy asymmetries between a dominant firm and its rivals has been advanced by the Commission in the Discussion Paper and the subsequent Guidance on unilateral exclusionary conduct, but it has not yet been endorsed by EU Courts. Regardless of the different status of the two abuse theories under EU competition law, the antitrust ban on above-cost pricing does not seem well founded, both in the selective nature of the contested conduct and in the need to remedy possible asymmetries between a dominant firm and its competitors.

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