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The Law of Exclusionary Pricing

Herbert J. Hovenkamp

University of Iowa - College of Law

January 2006

U Iowa Legal Studies Research Paper No. 05-34

The success of the Areeda-Turner test for predatory pricing and the Supreme Court's adoption of demanding proof requirements in its 1993 Brooke Group decision have made it very difficult for plaintiffs to win conventional predatory pricing claims. While many challenges to exclusionary pricing continue to be made, the legal theory has evolved away from classical predation to a variety of other theories. These include challenges to quantity and market share discounts, single item and package discounts, and various purchasing practices, including slotting fees, overinvestment in fixed cost assets, and overbuying of variable cost inputs. Plaintiffs have enjoyed somewhat greater success with these alternative theories, in large part because the practices are not as well understood as conventional price predation is. This essay examines the state of the law of both conventional predatory pricing and these more recent variants and offers some recommendations.

Number of Pages in PDF File: 30

Keywords: antitrust, exclusionary pricing, predatory pricing

JEL Classification: K21, L41, L42

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Date posted: January 20, 2006  

Suggested Citation

Hovenkamp, Herbert J., The Law of Exclusionary Pricing (January 2006). U Iowa Legal Studies Research Paper No. 05-34. Available at SSRN: http://ssrn.com/abstract=876968 or http://dx.doi.org/10.2139/ssrn.876968

Contact Information

Herbert J. Hovenkamp (Contact Author)
University of Iowa - College of Law ( email )
407 Boyd Law Building
Iowa City, IA 52242
United States
319-335-9079 (Phone)
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