Distinguishing Legitimate Price Competition from Unlawful Exclusionary Behaviour: Reconciling and Rationalising the Case-Law

Abstract

This paper analyses EU cases on abuse of a dominant position dealing with low cost pricing by a dominant firm to determine: (i) whether they are consistent with each other and the goals underpinning the EU competition laws: (ii) whether any evolution in the case-law can be detected and (iii) what changes can be anticipated in the future and would be desirable to ensure the law’s coherence. In particular, it considers the implications of the judgment of the General Court in Intel which has reignited the debate about the philosophical basis of EU competition law and the question of how ‘abusive’ conduct can or should be identified. The paper concludes that there is a need to rationalise the case law and for the EU Courts to explain more fully the policy underpinning the cases, when it is legitimate to rely on presumptions of illegality in the context of Article 102, how the various types of abuse relate to each other and how case-law under Article 101 can, or should, impact on the development of principles under Article 102. As the Court of Justice will have the opportunity to address many of these issues in the appeal from the General Court’s judgment in Intel, the paper examines some of the important issues which require assessment in that judgment.

Keywords: Abuse of a dominant position, predatory pricing, margin squeeze, rebates

JEL Classification: K21, L40, L41