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Should “Price Squeeze” Be A Recognized Form Of Anticompetitive Conduct?

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  • Dennis W. Carlton

Abstract

Should a “price squeeze” constitute anticompetitive conduct requiring investigation under the antitrust laws? A price squeeze occurs when a vertically integrated firm supplies an input to its downstream competitors at a price that generates a profit margin so low that the competitors exit the downstream market. I ask whether it is sensible to try to use antitrust laws to prevent such conduct or whether such an attempt would create more harm than benefit. The current case, linkLine Communications, Inc. v. SBC California, Inc., raises this exact question.

Suggested Citation

  • Dennis W. Carlton, 2008. "Should “Price Squeeze” Be A Recognized Form Of Anticompetitive Conduct?," Journal of Competition Law and Economics, Oxford University Press, vol. 4(2), pages 271-278.
  • Handle: RePEc:oup:jcomle:v:4:y:2008:i:2:p:271-278.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhn012
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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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