Should Price Squeeze Be a Recognized Form of Anticompetitive Conduct?
Dennis W. Carlton
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
Journal of Competition Law and Economics, Vol. 4, Issue 2, pp. 271-278, 2008
Should a price squeeze constitute anticompetitive conduct requiring investigation under the antitrust laws? A price squeeze occurs when a vertically integrated firm supplies an input to its downstream competitors at a price that generates a profit margin so low that the competitors exit the downstream market. I ask whether it is sensible to try to use antitrust laws to prevent such conduct or whether such an attempt would create more harm than benefit. The current case, linkLine Communications, Inc. v. SBC California, Inc., raises this exact question.
Keywords: K21, L4, L42
Date posted: June 17, 2008