Costs benchmarks as criterion for evaluation of predatory pricing

Research output: Contribution to journalArticle

Abstract

Predatory pricing is one of the forms of the abuse of a dominant position. Judicial institutions of the European Union and Commission during analysis of predatory pricing devote main attention to the relationship between costs and prices of the dominant undertaking. Moreover, attention is paid also to various cost benchmarks: average variable costs, average avoidable costs, average total costs and long run average incremental costs. European judicial institutions should pay less attention to the costs of a dominant undertaking than to evaluation of the effect of the actions of a dominant undertaking to consumers and competition in the market. Moreover, proposition of the Commission to use average avoidable costs in predation cases does not correspond to the practice of the Court of Justice and the General Court. The Commission should stipulate more clearly how average avoidable costs and long-run average incremental costs should be calculated in order to increase legal certainty of the undertakings. Establishment of prices higher than average total costs by the dominant undertaking should not be recognized as predatory pricing.
Original languageEnglish
Pages (from-to)585-603
JournalJurisprudencija: mokslo darbai
Volume2
Issue number19
Publication statusPublished - 2012

Fingerprint

Benchmark
Costs
Evaluation
Predatory pricing
Average cost
Incremental cost
Justice
Predation
Variable cost
European Union
European Commission
Abuse

Keywords

  • Abuse of dominant position
  • Predatory pricing

Cite this

Costs benchmarks as criterion for evaluation of predatory pricing. / Moisejevas, Raimundas; Novosad, Ana; Bite, Virginijus.

In: Jurisprudencija: mokslo darbai, Vol. 2, No. 19, 2012, p. 585-603.

Research output: Contribution to journalArticle

@article{fba38866d7b848a798c614591862e3c4,
title = "Costs benchmarks as criterion for evaluation of predatory pricing",
abstract = "Predatory pricing is one of the forms of the abuse of a dominant position. Judicial institutions of the European Union and Commission during analysis of predatory pricing devote main attention to the relationship between costs and prices of the dominant undertaking. Moreover, attention is paid also to various cost benchmarks: average variable costs, average avoidable costs, average total costs and long run average incremental costs. European judicial institutions should pay less attention to the costs of a dominant undertaking than to evaluation of the effect of the actions of a dominant undertaking to consumers and competition in the market. Moreover, proposition of the Commission to use average avoidable costs in predation cases does not correspond to the practice of the Court of Justice and the General Court. The Commission should stipulate more clearly how average avoidable costs and long-run average incremental costs should be calculated in order to increase legal certainty of the undertakings. Establishment of prices higher than average total costs by the dominant undertaking should not be recognized as predatory pricing.",
keywords = "Abuse of dominant position , Predatory pricing",
author = "Raimundas Moisejevas and Ana Novosad and Virginijus Bite",
year = "2012",
language = "English",
volume = "2",
pages = "585--603",
journal = "Jurisprudencija: mokslo darbai",
issn = "1392-6195",
publisher = "Mykolas Romeris University",
number = "19",

}

TY - JOUR

T1 - Costs benchmarks as criterion for evaluation of predatory pricing

AU - Moisejevas, Raimundas

AU - Novosad, Ana

AU - Bite, Virginijus

PY - 2012

Y1 - 2012

N2 - Predatory pricing is one of the forms of the abuse of a dominant position. Judicial institutions of the European Union and Commission during analysis of predatory pricing devote main attention to the relationship between costs and prices of the dominant undertaking. Moreover, attention is paid also to various cost benchmarks: average variable costs, average avoidable costs, average total costs and long run average incremental costs. European judicial institutions should pay less attention to the costs of a dominant undertaking than to evaluation of the effect of the actions of a dominant undertaking to consumers and competition in the market. Moreover, proposition of the Commission to use average avoidable costs in predation cases does not correspond to the practice of the Court of Justice and the General Court. The Commission should stipulate more clearly how average avoidable costs and long-run average incremental costs should be calculated in order to increase legal certainty of the undertakings. Establishment of prices higher than average total costs by the dominant undertaking should not be recognized as predatory pricing.

AB - Predatory pricing is one of the forms of the abuse of a dominant position. Judicial institutions of the European Union and Commission during analysis of predatory pricing devote main attention to the relationship between costs and prices of the dominant undertaking. Moreover, attention is paid also to various cost benchmarks: average variable costs, average avoidable costs, average total costs and long run average incremental costs. European judicial institutions should pay less attention to the costs of a dominant undertaking than to evaluation of the effect of the actions of a dominant undertaking to consumers and competition in the market. Moreover, proposition of the Commission to use average avoidable costs in predation cases does not correspond to the practice of the Court of Justice and the General Court. The Commission should stipulate more clearly how average avoidable costs and long-run average incremental costs should be calculated in order to increase legal certainty of the undertakings. Establishment of prices higher than average total costs by the dominant undertaking should not be recognized as predatory pricing.

KW - Abuse of dominant position

KW - Predatory pricing

M3 - Article

VL - 2

SP - 585

EP - 603

JO - Jurisprudencija: mokslo darbai

JF - Jurisprudencija: mokslo darbai

SN - 1392-6195

IS - 19

ER -