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Considering the Counterfactual in Predation Cases

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  • Winkler, Kay

Abstract

In order to distinguish predatory pricing from competition on the merits, the courts in the United States and in the European Union have established cost-based tests. In contrast, Australia and New Zealand make use of a counterfactual analysis - which has proved controversial when applied in telecommunications cases in New Zealand. The new European effects-based approach advocated by the European Commission entails a counterfactual analysis which is related to the profitability of the conduct. In this presentation it is suggested that such a counterfactual test could be useful in predation cases if it establishes a causal link between the profitability of the conduct and foreclosure effect.

Suggested Citation

  • Winkler, Kay, 2013. "Considering the Counterfactual in Predation Cases," Working Paper Series 19287, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    • Handle: RePEc:vuw:vuwcsr:19287
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/19287
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