Abstract

http://ssrn.com/abstract=2403159
 


 



Assessing Unfair Pricing Under China's Anti-Monopoly Law for Innovation-Intensive Industries


David S. Evans


University of Chicago Law School; University College London; Global Economics Group

Vanessa Yanhua Zhang


Global Economics Group, LLC; Renmin University of China

Xinzhu Zhang


Chinese Academy of Social Sciences (CASS) - Research Center for Regulation and Competition

March 1, 2014

University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 678

Abstract:     
China, like a number of other antitrust jurisdictions, has a law concerning unfair pricing. This article develops an economic framework for applying the unfair pricing law in China. The framework draws on the experience of courts and competition authorities in other jurisdictions and the writings of various commentators, particularly economists, on unfair pricing in those jurisdictions. It shows that virtually all jurisdictions have decided to consider unfair pricing claims only in exceptional circumstances, and rarely, if ever, in innovation-intensive industries. For those cases that pass this screen and receive consideration, the courts and competition authorities then, under the leading test, insist on substantial evidence that the price is significantly higher than cost and is unfair given the value provided to the buyer. This article shows that the exceptional circumstances screen and the rigorous unfair pricing test are motivated by a recognition, supported by substantial empirical evidence, that successful firms must have the assurance of receiving significant rewards to induce them to invest time and capital in highly risky innovation that is the source of economic growth and welfare. It concludes by showing that this approach is consistent with modern Chinese economic policy.

Number of Pages in PDF File: 57

Keywords: Anti-Monopoly Law, excessive pricing, unfair pricing, dynamic competition, antitrust, antitrust in high-technology industries, FRAND, China antitrust, unfair pricing, antitrust in innovation industries

JEL Classification: K21, K23, K40, L44, L43, L40, L51, L53, O21, O3, O31, O34, O38, P10, P22, P31

working papers series


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Date posted: March 2, 2014 ; Last revised: March 4, 2014

Suggested Citation

Evans, David S. and Zhang, Vanessa Yanhua and Zhang, Xinzhu, Assessing Unfair Pricing Under China's Anti-Monopoly Law for Innovation-Intensive Industries (March 1, 2014). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 678. Available at SSRN: http://ssrn.com/abstract=2403159 or http://dx.doi.org/10.2139/ssrn.2403159

Contact Information

David S. Evans (Contact Author)
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
University College London ( email )
London WC1E OEG
United Kingdom
Global Economics Group ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
Vanessa Yanhua Zhang
Global Economics Group, LLC ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
Renmin University of China ( email )
Room B906
Xianjin Building
Beijing, Beijing 100872
China
Xinzhu Zhang
Chinese Academy of Social Sciences (CASS) - Research Center for Regulation and Competition ( email )
Beijing, 100732
China
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