Abstract:
In order to distinguish predatory pricing from competition on the merits, the courts in the United States and in the European Union have established cost-based tests. In contrast, Australia and New Zealand make use of a counterfactual analysis - which has proved controversial when applied in telecommunications cases in New Zealand. The new European effects-based approach advocated by the European Commission entails a counterfactual analysis which is related to the profitability of the conduct. In this presentation it is suggested that such a counterfactual test could be useful in predation cases if it establishes a causal link between the profitability of the conduct and foreclosure effect.
