Should Price Squeeze Be a Recognized Form of Anticompetitive Conduct?

Posted: 17 Jun 2008  

Dennis W. Carlton

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: June 2008

Abstract

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

Suggested Citation

Carlton , Dennis W., Should Price Squeeze Be a Recognized Form of Anticompetitive Conduct? (June 2008). Journal of Competition Law and Economics, Vol. 4, Issue 2, pp. 271-278, 2008. Available at SSRN: https://ssrn.com/abstract=1146722 or http://dx.doi.org/nhn012

Dennis W. Carlton (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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