Price Squeezes, Foreclosure, and Competition Law: Principles and Guidelines

Abstract

This article looks at the definition, conditions and evidence necessary to establish that a price squeeze is an exclusionary abuse, and thus an infringement of EC competition law. It shows that the necessary conditions are demanding, and that the empirical test for a price squeeze must be carried out carefully. It offers practical guidelines for determining whether an exclusionary price squeeze is present, and particularly on the appropriate calculation of downstream margins (the 'imputation test') that should be employed.

Keywords: margin squeeze, price squeeze, excessive price, imputation test, foreclosure, dominance, essential facility

JEL Classification: K21, K23, K42, L12, L41, L43