Predatory Pricing - Economics and Law in the United States and the European Union (in English)
Gregory K. Leonard
Fa Xue Jia, pp. 100-110, 2009
Predatory pricing occurs where a firm deliberately sets prices below cost to eliminate, discipline or deter entry by a competitor, with the goal to subsequently recoup its losses by charging supra-competitive prices.
China’s Anti-Monopoly Law, Anti-Unfair Competition Law and Price Law contain prohibitions of predatory pricing, but their provisions do not go into much detail. Given the relative scarcity of guidance on predatory pricing in China, this paper examines the solutions proposed by economists, antitrust agencies and courts in the United States and the European Union. The paper analyzes many traditional and more modern economic theories, including the findings of the Chicago School and and the theories and models before and after the Chicago School. Moreover, the authors decribe the U.S. case law on predatory pricing, including Matsushita and Brooke Group, and the EU case law, ranging from AKZO to Wanadoo.
Note: The downloadable document is the English translation of the Chinese original, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1520308.
Number of Pages in PDF File: 20
Keywords: Antitrust, Competition Law, Law and Economics, Industrial Policy, Predatory Pricing, Abuse of Dominance, China
JEL Classification: L4
Date posted: March 10, 2010 ; Last revised: January 7, 2011