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http://ssrn.com/abstract=1412727
 
 

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Predatory Pricing after linkLine and Wanadoo


Gregory K. Leonard


Edgeworth Economics

Adrian Emch


Hogan Lovells

May 27, 2009

Global Competition Policy Magazine, May 2009

Abstract:     
In the United States, beginning with the Matsushita decision in 1986, the Supreme Court has required plaintiffs in predatory pricing cases to meet stringent conditions to prevail on their claims. As a result, predatory pricing cases have become 'rarely tried and even more rarely successful', to paraphrase Matsushita. The Supreme Court’s point of view appears to have been motivated by a concern with the chilling effects on price competition that 'false positives' in predatory pricing cases would have, combined with a strong skepticism, from both a theoretical and practical point of view, about whether predatory pricing is a rational business strategy. European Union (EU) antitrust law has generally followed a different path with regard to predatory pricing. The traditional EU case law, based on the AKZO judgment, has set a substantially lower bar to prevail on a predatory pricing claim than has the U.S. Supreme Court. For example, under the case law of the European Court of Justice (ECJ), a price could be found to be predatory, even if it were above average variable cost, where the defendant had a 'plan to eliminate a competitor'. This raises the question: When it comes to predatory pricing, is the 'EU from Venus, and the United States from Mars'? This short article attempts to answer the question by analyzing the recent developments in the area of predatory pricing across the Atlantic, in particular the Supreme Court’s linkLine decision and the ECJ’s Wanadoo judgment.

Number of Pages in PDF File: 12

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Date posted: June 3, 2009  

Suggested Citation

Leonard, Gregory K. and Emch, Adrian, Predatory Pricing after linkLine and Wanadoo (May 27, 2009). Global Competition Policy Magazine, May 2009. Available at SSRN: http://ssrn.com/abstract=1412727

Contact Information

Gregory K. Leonard
Edgeworth Economics ( email )
333 Bush St.
Suite 1450
San Francisco, CA 94104
United States
Adrian Emch (Contact Author)
Hogan Lovells ( email )
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