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Predatory pricing in platform markets: a modified test for firms within the scope of Article 3 of the DMA and super-dominant platform firms under Article 102 TFEU

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  • Anush Ganesh

Abstract

The paper examines predatory pricing in the context of two-sided digital platforms, arguing that traditional tests based on Average Variable Cost (AVC) may be inadequate for these markets. While predatory pricing by dominant firms is prohibited in both EU and US competition law, the current standards may not effectively capture predatory behavior in platform markets characterized by strong network effects and low marginal costs. The paper analyses cases where cross-subsidization between platform sides had predatory elements and resulted in findings of abuse of dominant position. Given platforms' unique characteristics, it proposes a modified test under Article 102 TFEU for super-dominant platforms and those within the scope of Article 3 of Digital Markets Act's scope. The proposal extends the Akzo test by presuming prices below Average Total Cost (ATC) to be abusive, rather than using AVC, with LRAIC as a proxy for ATC. This addresses the current test's limitations for low marginal cost businesses while allowing for objective justification.

Suggested Citation

  • Anush Ganesh, 2025. "Predatory pricing in platform markets: a modified test for firms within the scope of Article 3 of the DMA and super-dominant platform firms under Article 102 TFEU," European Competition Journal, Taylor & Francis Journals, vol. 21(2), pages 231-266, May.
    • Handle: RePEc:taf:recjxx:v:21:y:2025:i:2:p:231-266
    DOI: 10.1080/17441056.2024.2428032
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