Working paper 00/023 - Abstract

Recent Developments in Definitions of Abusive Pricing in European Competition Policy

Paul A Grout

The Azko judgement specifies upper and lower bound threshold tests for predatory pricing. The European Commission have recently explicitly sought to change the lower threshold test but have remained silent on the upper threshold. This paper assesses the Commission's position and alternatives for the upper threshold. The use of combinatorial tests for the latter, as suggested in the guidelines to the UK 1998 Competition Act, is also assessed. The paper then considers the price squeeze test and the interpretation of discriminatory pricing in this context. It is argued that application of price squeeze tests where a company has several retail products and several upstream inputs requires a market by market application of discrimination.

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