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The Law of Exclusionary Pricing

30 Pages Posted: 20 Jan 2006  

Herbert J. Hovenkamp

Univ. of Pennsylvania Law and Wharton Business

Date Written: January 2006

Abstract

The success of the Areeda-Turner test for predatory pricing and the Supreme Court's adoption of demanding proof requirements in its 1993 Brooke Group decision have made it very difficult for plaintiffs to win conventional predatory pricing claims. While many challenges to exclusionary pricing continue to be made, the legal theory has evolved away from classical predation to a variety of other theories. These include challenges to quantity and market share discounts, single item and package discounts, and various purchasing practices, including slotting fees, overinvestment in fixed cost assets, and overbuying of variable cost inputs. Plaintiffs have enjoyed somewhat greater success with these alternative theories, in large part because the practices are not as well understood as conventional price predation is. This essay examines the state of the law of both conventional predatory pricing and these more recent variants and offers some recommendations.

Keywords: antitrust, exclusionary pricing, predatory pricing

JEL Classification: K21, L41, L42

Suggested Citation

Hovenkamp, Herbert J., The Law of Exclusionary Pricing (January 2006). U Iowa Legal Studies Research Paper No. 05-34. Available at SSRN: https://ssrn.com/abstract=876968 or http://dx.doi.org/10.2139/ssrn.876968

Herbert J. Hovenkamp (Contact Author)

Univ. of Pennsylvania Law and Wharton Business ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
319-512-9579 (Phone)

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