Tuesday, January 15, 2013
Posted by D. Daniel Sokol
Liyang Hou KoGuan Law School, Shanghai Jiao Tong University describes The Abusive Nature of Price Squeeze in the EU.
ABSTRACT: This article explores the abusive nature of price squeeze through investigating why a dominant undertaking subject to a price squeeze liability cannot be allowed to benefit from its competition advantages over vertical integration. As such a result, price squeeze obliges a dominant undertaking to subsidize non-vertically integrated competitors. This goes against a general principle that competition law protects only competition rather than inefficient competitors. The examination of the six price-squeeze cases within the context of EU competition law reveals that price squeeze cannot be fully explained by other closely related concepts, such as excessive pricing, predatory pricing and refusal to deal. Accordingly, this article develops a new theory for the abusive nature of price squeeze. This theory tells that price squeeze aims to maintain competition on a regulated market where a sector-specific regulator imposes both a duty to deal and a price regulation upon the dominant undertaking concerned.