Predatory pricing: a framework for analysis

Abstract

One of the key principles of EU Competition law is a prohibition of the abuse of a dominant position established in the Article 102 of the TFEU. Predatory pricing is one of the forms of the abuse of dominant position. To decide whether the dominant undertaking has referred to predatory pricing it is necessary to check several elements: costs and prices of the dominant undertaking; the possibility to recoup losses; intent; and objective justifications. The Court of Justice, the European Commission and competition institutions in most member states perform extensive analysis of a relationship between costs and prices of a dominant undertaking while dealing with cases on predatory pricing. However, we believe that competition authorities should pay more attention to evaluation and to whether pricing will cause elimination of competitors and damage to consumers. This article critically reviews the framework of the analysis of predatory pricing in the practice of the Court of Justice and the European Commission.