This paper aims at identifying, in which ways a recoupment requirement in the test for predatory pricing, can contribute to EU-law. The Chicago School has a very strong skepticism about predatory pricing. Mcgee argued, that recoupment of losses was unlikely and therefore, that the strategi was irrationel. Game-theoretic models have however shown, that predatory pricing can be rational because of information asymmetries and linkages across markets. The old belief, that the strategy is of no antitrust concern, should therefor be dispelled. The legal standard both in the EU and the US has been stronlgy inspired by the Areeda Turners test, which is based on an objective price cost comparison. This test can be supplemented by the need to show likely recoupment. Recoupment can be analyzed from a qualitativ or quantative perspective, but the quantative analysis poses serious measurment problems, which can lead to high error costs. In the EU the legal test is based on a price cost comparison and the dominant firms intent. The showing of likely recoupment has however been rejected several times by both the Commission and the Union courts. The Commission has among others rejected the requirement, because it believes, that the showing of recoupment is implied in the dominance test for article 102 TFEU. In the US the need to show likely recoupment has been part of the legal test since 1993. Because of the very skeptical view held by the American courts, the requirement has been used in such a way, that is has become almost impossible to prove. There are many reasons to both condem and applaud the recoumpent requirement. Looking at the requirement from a theoretical standpoint, it helps to sort out the cases, where there is no likelihood of any long-term harm to competition or consumers, eventhough there may be some short term inefficiency. While a test for dominance might indicate the likelyhood for receoupment, recoupment can not be implied from dominance. The paper advocates for the introduction of a recoupment requirement in the EU, although in a modified version, which is based on a wish to minimize error cost stemming from false positives and false negatives.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||88|