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Diverging approach to price squeezes in the United States and Europe
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McMahon, Kathryn E. and Hay, George Alan (2012) Diverging approach to price squeezes in the United States and Europe. Working Paper. Coventry: University of Warwick. Warwick School of Law Research Paper (Number 2012/04).
An open access version can be found in:
Official URL: http://ssrn.com/abstract=2012450
Abstract
Notwithstanding assertions of greater harmonization and convergence between United States and European Union competition law, recent case law has identified significant differences in their approaches to the regulation of a price or margin squeeze. In the US after linkLine the likelihood of a successful claim has been significantly diminished, particularly if there has been no prior course of voluntary dealing and no downstream predatory pricing. In contrast, in a series of decisions in liberalized telecommunications markets, the EU Courts in applying an “as efficient competitor test” have focused on the preservation of competitive rivalry as “equality of opportunity.” This significantly broadens the potential liability for a margin squeeze in the EU and reconstitutes EU competition law as a form of de facto regulation in liberalized markets. Faced with the uncertainty of this standard, the dominant firm has an incentive to avoid liability by raising its retail prices, to the detriment of consumers. This article evaluates this divergence in approach to the regulation of a price or margin squeeze in the US and EU and traces these approaches to differing conceptions of dominant firm regulation which in turn have informed different understandings of the regulation of a “refusal to supply” and the intersection of competition law with sector-specific regulation.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Divisions: | Faculty of Social Sciences > School of Law | ||||
Series Name: | Warwick School of Law Research Paper | ||||
Publisher: | University of Warwick | ||||
Place of Publication: | Coventry | ||||
Official Date: | 28 February 2012 | ||||
Dates: |
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Number: | Number 2012/04 | ||||
Number of Pages: | 46 | ||||
Institution: | University of Warwick | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Open Access Version: |
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