Predatory Pricing as an Abuse of Dominan

8/18/2019 Predatory Pricing as an Abuse of Dominan

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PROJECT

ONcompetition law

A CRITICAL STUDY ON PREDATORY PRICING

SUBMITTED BY:

SIMRAN KATYAL

1282096

BBALLB (B)

4TH YR

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ACKNOWLEDMENTEvery projec !"# or $%&'' "$ $ cce$$ ' '&r#e'y * e o +e e or o & , %!er o -o,*er ' peop'e

-+o +&ve &'-&y$ #"ve, +e"r v&' &!'e &*v"ce or 'e, & +e'p",# +&,*. I S",cere'y &pprec"& e +e

",$p"r& "o,/ $ ppor &,* # "*&,ce o &'' +o$e peop'e -+o +&ve !ee, ",$ r %e, &' ", %& ",# +"$

projec & $ cce$$.

I &% e re%e'y #r& e ' o ASSISTANT 3R 5.KA SHIKI or +e co, "*e,ce !e$ o-e* ", %e

&,* e, r $ ",# %y c&$e $ *y e, " 'e* & cr" "c&' $ *y o, 3RE7AT RY 3RI IN . I &'$o

e e,* %y #r& " *e o %y projec # "*e o %&% -+o &$$"$ e* %e ", co%p"'",# +e projec .

A +"$ j ,c re I ee' *eep'y +o,ore* ", e pre$$",# %y $",cere +&, $ o 7"rec or N.K.+& r&!or y or %& ",# +e re$o rce$ &v&"'&!'e & r"#+ "%e &,* prov"*",# &,* prov"*",#

v&' !&'e ",$"#+ $ 'e&*",# o +e $ cce$$ ' co%p'e "o, o %y projec .

I -o '* &'$o '" e o +&, or prov"*",# &'' ,ece$$&ry *oc %e, $ &,* o +er re$o rce$ ,ece$$&ry

or co%p'e "o, o +e -or &$$"#,e*.

L&$ ! ,o 'e&$ I p'&ce & *eep $e,$e o #r& " *e o %y &%"'y %e%!er$ &,* %y r"e,*$ -+o

+&ve !ee, co,$ &, $o rce o ",$p"r& "o, * r",# +e prep&r& "o, o +"$ projec -or .

NAME: SIMRAN KATYAL

R LL N . 1282096.

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Contents

ACKNOWLEDMENT......................................................................................................1

NTROD!CT ON........................................................................................................... "

#ACTOR$ DETERM N N% PREDATOR& PR C N%............................................................ '

DOM NANCE(........................................................................................................... '

)ARR ER$ TO ENTR& AND RE*ENTR&(....................................................................... '

E+CE$$ CAPAC T&(................................................................................................... ,

NON*PR CE PREDAT ON(.......................................................................................... ,

OT-ER #ACTOR$(.....................................................................................................,DENT # CAT ON O# PREDATOR& PR C N%...................................................................

• P/ice*Co0t Te0t0.................................................................................................

• T e Two*Tie/ Te0t(..............................................................................................

• Te0t 3o/ P/e4ato/5 ntention...............................................................................

• A6o7e Co0t P/icing Te0t(....................................................................................

• Po00i6ilit5 o3 Reco8pment.................................................................................

CO$T MEA$!RE$ ADOPTED N ND AN COMPET T ON LAW.........................................9

#EA$ ) L T& O# PREDATOR& PR C N%........................................................................1:

COMPAR $ON O# T-E LAW N D ##ERENT J!R $D CT ON$ W T- RE#ERENCE TO $OMECA$E$....................................................................................................................... 11

Ce/tain ca0e0(........................................................................................................... 1"

AK;O 7. Commi00ion


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INTRODUCTION3re*& ory 3r"c",# re er$ o +e $" & "o, -+ere & *o%",&, "r% re* ce$ " $ pr"ce o !e'o- co$

'eve' or & per"o* o "%e * r",# -+"c+ " -"'' !e &!'e o e'"%",& e or co, &", & co%pe " "ve

orce.1 5o''o-",# +& / &,* o,ce +e pre*& ory "r% *ee%$ " $& e e,o #+; " -"'' r&"$e " $ pr"ce o

& 'eve' &!ove +e co%pe " "ve pr"ce 'eve' ", or*er o reco p +e 'o$$e$ %&*e * r",# +e re* c "o,

per"o*.2 I "$ +e *o%",&, co%p&,y ", $ c+ & %&r e -+"c+ "$ '" e'y o +&ve !o + +e ",c'",& "o,

&,* +e re$o rce$ o ",&,ce $ c+ $ r& e#y &,* $ c+ pr"c",# c&, !e e< &''y = , &"r> o

co%pe " or$.?

3re*& ory pr"c",# "$ ", pr&c "ce o e, *" "c ' o *"$ ",# "$+ ro% ,or%&' pr"ce co%pe " "o,. T+e

'o-er",# o pr"ce$/ +e *"rec 'y v"$"!'e p&r o pre*& "o,/ "$ &'$o &, e$$e, "&' e'e%e, o

co%pe " "o,. By 'o-er",# " $ pr"ce or "%prov",# +e < &'" y o " $ pro* c & co%p&,y co%pe e$

o, +e %&r e . T+"$ co%pe " "o, +& !e,e " $ co,$ %er$ &,* +& & co%pe " "o, & +or" y -&

o *e e,* &,* pro ec . 3r"c",# "$ ,o pre*& ory %ere'y !ec& $e & co%p&,y "$ 'o-er",# " $ pr"ce.4

T+e co,cer, -" + pre*& ory pr"c",# "$ +& "r%$ %"#+ $ r& e#"c&''y c pr"ce$ o ,pro " &!'e

'eve'$ ", +e $+or er% ", or*er o e'"%",& e or *"$c"p'",e r"v&'$ &,* +e, r&"$e 'o,# r , pr"ce$ o

$ pr&@co%pe " "ve 'eve'$/ ", '"c ",# & ,e 'o,#@ er% ",j ry o, co,$ %er$. T+e pro!'e% "$ +&

$ c+ +&r% ' pre*& ory pr"c",# "$ o e, +&r* o *"$ ",# "$+ ro% *e$"r&!'e co%pe " "ve pr"cec ",#/ $o +& & e%p $ o co,*e%, +e or%er %&y %"$ & e,'y co,*e%, &,* *e er +e '& er.6

1 M&+er M. 7&!!&+; E &,* K o%pe " "o, L&-:@ o%%e, &ry/ &$e$ &,* M& er"&'$/ &%!r"*#e,"ver$" y 3re$$/ pp?19.

2 I*. A pp?19.

" o&,,& oy*er &,* A'!er ",& A'!or$@ L'ore,$/ oy*er>$ E o%pe " "o, L&-/ or* ,"ver$" y3re$$/ pp?19.

@ 7or"$ H"'*e!r&,*/ T+e Ro'e o Eco,o%"c A,&'y$"$ ", +e E o%pe " "o, R 'e$/ K' -er L&-I, er,& "o,&'/ pp?C?@?C .

' E",er E'+& #e &,* 7&%"e, er&*",/ o%pe " "o, L&- &,* Eco,o%"c$/ H&r 3 !'"$+",#/ pp?14.

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Re!& e$ &,* $"%"'&r pr&c "ce$ &re &, e$$e, "&' co%po,e, o +e co%pe " "ve proce$$/ &,* +&

'&- $+o '* ,o *e er & *o%",&, "r% ro% p&$$",# o, " $ e "c"e,cy o c $ o%er$ ", +e or% o

'o-er pr"ce$. T+e '&- o, pre*& ory pr"c",# +&$ o re&* & ",e '",e !e -ee, ,o co,*e%,",#

co%pe " "ve re$po,$e$ o, +e p&r o *o%",&, "r%$ o, +e o,e +&,* &,* pro+"!" ",#

,re&$o,&!'e e c' $"o,&ry co,* c o, +e o +er .C

3r"c",# "$ &'$o ,o pre*& ory j $ !ec& $e +e 'o-er pr"ce %e&,$ ",c rr",# 'o$$e$ or ore#o",#

pro " $ ", +e $+or r ,. A, ",ve$ %e, ", e%por&r"'y 'o-er pr"ce$ %&y or ",$ &,ce !e re< "re*

o e, er & %&r e or o %& e %ore c $ o%er$ &%"'"&r -" + +e pro* c .8

Now the question that arises is why would a co !any !ractice !redatory !ricin"#

T+e &,$-er "$ $"%p'y o cre& e & %o,opo'y %&r e &,* !e +e pr"ce %& er. A,o +er re&$o, or

"r%$ o *o pre*& ory pr"c",# %&y !e !ec& $e " "$ & !e er &' er,& "ve o %er#er$. T+e Mc ee@

3o$,er 7e!& e co%p&re$ +e pro$ &,* co,$ o %er#er$ &,* pre*& ory pr"c",# ", -+"c+ 3o$,er

+e'* +& pre*& ory pr"c",# "$ !e er &$ " "$ *" "c ' o !e "*e, " "e* &,* &'$o 'o-er ", co$ .9

e,er&''y pre*& ory pr"c",# "$ & e, &$ &, = , &"r> pr&c "ce !ec& $e " "$ &, E, ry B&rr"er +&

+",*er$ &"r co%pe " "o, &,* %&,y ,*er & ",#$ %&y e%p'oy ,e +"c&' %e&,$ o c *o-, o,

co$ $. A'$o/ " +&r%$ co,$ %er$ ", +e 'o,# r ,. T+"$ "$/ -" +o & *o ! / &, &, "@co%pe " "ve

pr&c "ce &,* +e,ce "''e#&'. To ,*er$ &,* +e '' "%p'"c& "o, o +e co,cep o pre*& ory pr"c",#/

'e $ "r$ ,*er$ &,* +e -o er%$ *o%",&, &,* &! $"ve.

A *o%",&, co%p&,y re er$ o & co%p&,y +o'*",# & c+ , o +e $+&re o +e re'ev&, %&r e . A$

o +o- % c+ $+o '* +e %&r e $+&re !e/ "$ & *e!& &!'e < e$ "o,. 7o%",&, po$" "o, "$ & po$" "o,

o $ re,# +/ e,joye* !y &, e, erpr"$e/ ", +e re'ev&, %&r e / ", I,*"&/ -+"c+ e,&!'e$ " o:

, I*. A pp?1 .

7or"$ H"'*e!r&,*/ T+e Ro'e o Eco,o%"c A,&'y$"$ ", +e E o%pe " "o, R 'e$/ K' -er I, er,& "o,&'Do' %e ?9/ pp ?C?@?C4.

"!"*.

9 R"c+&r* 3o$,er (2001)/ A, " r $ L&-: A, Eco,o%"c 3er$pec "ve/ 2 ,* e*" "o,/ ,"ver$" y o +"co3re$$/ pp18 .

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• per& e ",*epe,*e, 'y o co%pe " "ve orce$ prev&"'",# ", +e re'ev&, %&r e ; or • A ec " $ co%pe " or$ or co,$ %er$ or +e re'ev&, %&r e / ", " $ &vo r.10

A$ &r &$ +e er% &! $e "$ co,cer,e*/ " "$ very o!v"o $ +& ", every %&r e +ere -"'' !e & $%&''

, %!er o *o%",&, p'&yer$ &,* $o%e $%&''er p'&yer$. T+e $%&'' p'&yer$/ ",*"v"* &''y/ *o ,o+&ve +e po-er o & ec +e %&r e co,*" "o,$ &$ $ c+. B +e *o%",&, p'&yer$/ $"%p'y !y

v"r e o +e +o'*",# ", +e %&r e / c&, ", ' e,ce +e %&r e o & co,$"*er&!'e e e, . No-/ -+e,

& *o%",&, p'&yer $e$ " $ po-er o ", ' e,ce +e %&r e o !e,e " " $e' ", $o%e -&y o +er +&,

+ro #+ &"r co%pe " "o,/ " "$ ,o-, &$ &, &! $e o +e *o%",&,ce. T+& "$/ -+e, & co%p&,y

& e$ , &"r &*v&, e o " $ *o%",&, po$" "o, o +",*er co%pe " "o,/ " "$ &, &! $e. Sec "o, 4(

o +e I,*"&, o%pe " "o, Ac $ & e$ +& ,o e, erpr"$e $+&'' &! $e " $ *o%",&, po$" "o,.

T+ $ +e %&jor e'e%e, $ ",vo've* ", +e *e er%",& "o, o pre*& ory !e+&v"o r &re:

• E$ &!'"$+%e, o *o%",&, po$" "o, o +e e, erpr"$e ", +e re'ev&, %&r e .• 3r"c",# !e'o- co$ or +e re'ev&, pro* c ", +e re'ev&, %&r e !y +e *o%",&,

e, erpr"$e.11• I, e, "o, o re* ce co%pe " "o, or e'"%",& e co%pe " or$.

$ACTOR% DETERMININ& 'REDATOR( 'RICIN&

DOMINANCE)S",ce '&r#e c&p" &' re$erve$ &re ,ee*e* o $ $ &", +e 'o$$e$ * r",# +e !e'o- co$ $e''",# per"o*/

+e,ce o,'y & *o%",&, "r% -o '* !e &!'e o pr&c "ce pre*& ory pr"c",#. 12 T+e *o%",&,ce o &

co%p&,y c&, !e &,&'y e* -" + re#&r* o +e re'ev&, pro* c &,* #eo#r&p+"c %&r e !y

1: E p'&,& "o, o Sec. 4(2) o +e I,*"&, o%pe " "o, Ac .

11 = o$ > or +"$ p rpo$e +&$ !ee, *e ",e* ", +e o%pe " "o, o%%"$$"o, o I,*"& (7e er%",& "o, oo$ o 3ro* c "o,) Re# '& "o,$/ 2009 &$ ,o " "e* !y +e o%%"$$"o,.

12 F. K"p D"$c $"/ o$ep+ E. H&rr",# o,/ R o+, M. Der,o,"/ Eco,o%"c$ o Re# '& "o, &,* A, "@ r $ /MIT 3re$$/ pp?16.

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e &%",",# +e po e, "&' *e%&,* &,* $ !$ " &!"'" y o +e pro* c $ or $erv"ce$. T+e eco,o%"c

$ re,# + o +e pre*& or %&y *er"ve ro% " $ po$" "o, ", o +er %&r e $.1?

*ARRIER% TO ENTR( AND RE+ENTR()

S cce$$ ' pre*& ory pr"c",# re< "re$ cer &", 'eve' o e, ry !&rr"er$ o +e %&r e . +er-"$eo +er po e, "&' r"v&'$ -o '* "%%e*"& e'y re@e, er +e %&r e o,ce +e pre*& or r&"$e$ " $ pr"ce

&,* !y &**",# +e"r o p o +& o +e pre*& or *r"ve +e pr"ce$ !&c o co%pe " "ve 'eve'14

E, ry !&rr"er$ e "$ -+e, & ,e- %&r e e, r&, &ce$ co$ +& +e ",c %!e, "r% ,ee* ,o !e&r

or ,o 'o,#er &ce$/ ".e./ " e* co$ ",ve$ %e, $ e c. T+e e, r&, o, +e o +er +&,* % $ ",c r $ c+

co$ $ &,* +e,ce &ce$ +e r"$ o ,*er@pr"c",# !y &, ",c %!e, -" + $ , co$ $/ +e '& er &c ",#

&$ & !&rr"er o e, ry/ #"v",# +e ",c %!e, +e po-er o r&"$e pr"ce$ &!ove +e co%pe " "o, 'eve'.1

Re@e, ry !&rr"er$ o, +e o +er +&,* e "$ -+e, & "r% +& +&$ 'e & %&r e !e&r$ $"#," "c&, co

", $ee",# o reope, " $ ! $",e$$. I, +e &!$e,ce o re@e, ry !&rr"er$ +e "r% -+"c+ +&$ !ee,

orce* o e " +e %&r e !ec& $e " -&$ ,&!'e o $ $ &", +e &r " "c"&''y 'o- pr"ce$ *"c & e*

+e pre*& or co '* e, er +e %&r e &", o,ce pr"ce$ &re r&"$e* o %o,opo'y 'eve'/ + $ !e",#

&!'e o ,*er%",e +e pre*& or$ pr"c",# po'"cy.16

E,CE%% CA'ACIT()E ce$$ c&p&c" y "$ & pre@re< "$" e or pre*& ory pr"c",#. T+e pre*& or % $ !e &!'e o &!$or! &

+e ,e- *e%&,* cre& e* !y " $ pr"ce c $/ &,* ", +e c&$e o pre*& "o, &",$ e "$ ",# r"v&'$/ +e

pre*& or % $ !e &!'e o &!$or! +e r"v&'>$ $&'e$. I " c&,,o *o !o + +e$e/ *e%&,* -"'' e cee*

pre*& or>$ o p &,* pr"ce$ -"'' +&ve o r"$e/ -+"c+ -"'' & e +e pre$$ re o +e r"v&'$ &,*

&''o- +e% o $ rv"ve.1C

1" H. Hove, &%p/ 5e*er&' A, " r $ 3o'"cy/ T+o%$o,GFe$ / 200 / c+&p 8.

1@ Bro*'ey e &'/ 3re*& ory 3r"c",#.

1' E #e,e B "#"e#/ E o%pe " "o, L&-/ Fo' er$ K' -er L&- &,* B $",e$$/ pp419.

1, "!"*

1 F. K"p D"$c $"/ o$ep+ E. H&rr",# o,/ R o+, M. Der,o,"/ Eco,o%"c$ o Re# '& "o, &,* A, "@ r $ /MIT 3re$$/ pp?14.

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NON+'RICE 'REDATION) No, pr"ce pre*& "o, ",c' *e$ e ce$$"ve pro* c *" ere, "& "o,/ pre*& ory &*ver "$e%e, &,*

",ve$ %e, / pre*& ory pro* c ",,ov& "o,. T+e %&", &"% o +e$e ,o, pr"ce pre*& ory pr"c",# "$

o r&"$e +e co$ $ o +e r"v&' "r%$. I co$ ",cre&$e c&, !e "%po$e* o, +e r"v&'$/ +e pre*& or

"r% c&, pro " "%%e*"& e'y/ eve, " +e r"v&'$ re%&", ", ! $",e$$/ +"$ "$ !ec& $e " $ %&r#", -"''

",cre&$e propor "o,& e'y -" + r"$",# pr"ce 'eve'$. A,o +er $ce,&r"o "$ eve, " +e pr"ce$ re%&",

co,$ &, / +e pre*& ory "r% #&",$ %&r e $+&re &$ r"v&' re$ r"c $ o p .18

OT-ER $ACTOR%)E &%",",# %&r e $+&re re,*$ * r",# +e per"o* o pre*& "o, "$ "%por &, or reco p%e,

&,&'y$"$. I +e $+&re$ *"* ,o c+&,#e * r",# +& per"o*/ +e, reco p%e, -o '* +&ve o &ppe&r

o !e "%p'& $"!'e.19 Lo- pr"ce e'&$ "c" y o *e%&,* &c"'" & e$ reco p%e, &$ *e%&,* -"'' *ec'",e

re'& "ve'y 'e$$ -+e, +e "r% r&"$e$ +e %&r e pr"ce.20 I & pre*& or e,joy$ #re& er !r&,* roy&' y/+e 'e$$ co$ 'y & pre*& ory pr"c",# $+&'' !e or +e "r%.21 T+e %ore e "c"e, +e ",c %!e, "$ o

" $ r"v&'$/ +e 'e$$ e pe,$"ve " -"'' !e o co,* c & pre*& ory pr"c",# c&%p&"#,.

3re*& ory pr"c",# "$ o e, co,$"*ere* o !e e&$"!'e o,'y -+ere "r%$ oper& e ", % ' "%&r e . I "$

&r# e* +& " +e "r% oper& e$ ", o,'y o,e %&r e " "$ %ore r& "o,&'e or " o &!$or! +e ,e

e, r&, (!y %er#er or & eover) or o &cco%%o*& e " / r& +er +&, ",c r #re& er 'o$$e$ !y

,*erc ",# " .22 Lo$$e$ $ ere* !y +e "r% oper& ",# ", & % ' " %&r e c&, !e reco pe* !y +e

pro " $ ro% +e o +er %&r e ", -+"c+ +e "r% oper& e$. A "r% %&y !e & % ' "%&r e

1 R"c+&r* L",*!er#/ T+e A%!"# " y o 3re*& ory 3r"c",#: S r& e#y &$ & '&r" "er/ Re$e&rc+ 3&per/ pp?C

19 o+, R. Lo r./ Are 3re*& ory o%%" %e, $ re*"!'e F+o S+o '* +e o r $ Be'"eve / +"co:,"ver$" y o +"co 3re$$/ 1999. pp10

2: o r,&' &r "c'e !y re# Le B'&,c; R&,* o r,&' o o%pe " "o, L&-/ S"#,&''",# S re,# +: L"%"

3r"c",# &,* 3re*& ory 3r"c",#/ Do'. 2?/ 1992.

21 A&ro, S. E*'",/ 3re*& ory 3r"c",#J Re$e&rc+ H&,*!oo o, Eco,o%"c$ o A, " r $ / E*. E",erE'+& #e/ E*-&r* E'#&r/ 2010.

22 7or"$ H"'*e!r&,*/ T+e Ro'e o Eco,o%"c A,&'y$"$ ", +e E o%pe " "o, R 'e$/ K' -er L&-I, er,& "o,&'/ pp?6C.

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#eo#r&p+"c&' r& +er +&, & pro* c $e,$e/ $o +& rep & "o, or pre*& "o, ", o,e %&r e %&y *e

e, r&, $ e'$e-+ere. 2?

IDENTI$ICATION O$ 'REDATOR( 'RICIN&T+e v&r"o $ e$ $ %o$ co%%o,'y e%p'oye* or "*e, " y",# pre*& ory pr"c",# &re &$ o''o-$:

• 'rice+Cost Tests (3 T): 3r"ce@ o$ Te$ $ &re %o$ co%%o,'y $e* oo'$ o "*e, " y

3re*& ory 3r"c",#/ &,* "$ $e* &cro$$ &'' j r"$*"c "o,$/ ", $o%e or% or +e o +er. T+e$e

e$ $ e &%",e -+e +er +e co%p&,y or "r% "$ ",c rr",# $o%e 'o$$e$ or 'e#" "%& e

re&$o,$ or j $ or 3re*& ory 3r"c",#. T+e$e e$ $ 'oo ", o +e *e &"'e* &cco , $ o +e

"r%$ &,* co%p&re +e"r co$ $ &,* +e"r pr"ce$ o re&c+ +e co,c' $"o,. T+e 3r"ce@ o$

Te$ $ %&y !e o v&r"o $ ype$; +e %o$ "%por &, &%o,# +e% !e",# +eAreeda+Turner

test +& " +e $e'' pr"ce "$ !e'o- +e S+or R , Avere D&r"&!'e o$ or +e %&r#",&'

co$ / " "$ & c&$e o pre*& ory pr"c",#.24 T+e &reer.s test /0 +e'* +& +e $cope o +e

Aree*&@T r,er e$ -&$ oo -"*e &,* +& " $+o '* !e co p'e* -" + & e$ o ", e, "o, &,*

"$ &,o +er 3r"ce@ o$ Te$ . T+ere &re , %ero $ o +er 3r"ce@ o$ Te$ $ ! &'' o +e%

!&$"c&''y &"% & +e $&%e +",#.• The Two+Tier Test) T+e T-o@T"er Te$ o o$ o- &,* K'evor"c 26 co,$"$ $ o -o@ "er$

&$ +e ,&%e $ ##e$ $. T+e "r$ "$ +e $ r c r&' e$ o e &%",e +e ype o +e re'e

%&r e . 5or e &%p'e/ " +e %&r e "$ & very co%pe " "ve o,e -" + &"r'y 'o- e, ry

!&rr"er$/ +e, c+&,ce$ o & $ cce$$ ' pre*& ory pr"c",# "$ &'%o$ ,"'. T+e $eco,* "er "$ &

2" A'"$o, o,e$ &,* Bre,*& S ",/ E o%pe " "o, L&-: Te / &$e$ &,* M& er"&'$/ or* ,"ver$" y3re$$/ pp44 .

2@ Aree*& &,* T r,er (19C )/ 3re*& ory 3r"c",# &,* Re'& e* 3r&c "ce$ ,*er Sec "o, 2 o +e S+er%&,

Ac / H&rv&r* L&- Rev"e-/ pp68 @688.

2' 7o #'&$ 5. reer/ (19C9)/ A r" "< e o Aree*& &,* T r,er>$ S &,*&r* or 3re*& ory 3r&c "ce$/A, " r $ B ''e ",/ (24)/ pp2? .

2, 3& ' L. o$ o- &,* A'v", K. Levor"c / (19C9)/ A 5r&%e-or or A,&'y$",# 3re*& ory 3r"c",#/ Y&'eL&- o r,&' 89(2)/ pp24 @2 8.

9 | P a g e


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!e+&v"o r&' e$ -+"c+ e &%",e$ +e !e+&v"o r o o,e p&r "c '&r e, erpr"$e ", re'& "o,

-" + +e %&r e o &$cer &", " +ere "$ &, &! $e o *o%",&,ce or ,o .• Test 1or 'redatory Intention : T+e Te$ or 3re*& ory I, e, "o, "$ ye &,o +er e$ -+"c+

+&$ !ee, &ccep e* ", %&,y j r"$*"c "o,$ ", %&,y c&$e$. I, I,*"&/ !e'o- co$ e$ ",# "$ &'$o

&cco%p&,"e* !y prov",# ", e, / -+"c+ "$ ,ece$$&ry ", prov",# &,y &''e#e* pre*& ory

co,* c . Accor*",# o +e Ac / !e'o-@co$ pr"c",# -" + & v"e- o re* ce co%pe " "o, or

e'"%",& e +e co%pe " or$J $+&'' &%o , &$ &! $e o *o%",&,ce. I, +e pr"ce &! $e c&$e$/

e c' $"o,&ry ", e, "$ very "%por &, &$ "$ #"ve, !y +e AK 2C r 'e ", +e E

o%pe " "o, L&-.• A2o3e Cost 'ricin" Test) T+e A!ove@ o$ 3r"c",# Te$ "$ ,o & co%p'e e e$ ! " $&y$

+& eve, +o #+ +e pr"ce$ &re ,o !e'o- co$ or +& e, erpr"$e/ " %&y $ "'' !e 3re*& ory

3r"c",#. Ho-ever/ " !r",#$ &, "*e& *" ere, ro% %o$ o +er prev&'e, e$ $/ !y " $ very

pre%"$e. I &pp'"e$ o &''e#e* pre*& or$ +& &re $e''",# & & pr"ce &!ove +e co$ $/ &,* ,o

!e'o- ! &re $ "'' pre*& ",#. To #"ve &, e &%p'e/ +ere %&y !e & very *o%",&, &,* '&r#e

e, erpr"$e -+"c+ !y v"r e o " $ '&r#e $c&'e o pro* c "o, +&$ very 'o- co$ o pro* c "o,

", co%p&r"$o, o +e co$ ",c rre* !y o +er e, erpr"$e$ &,* +e,ce %&y +&ve & pre*& ory

e ec ", +e 'o,# r ,.• 'ossi2ility o1 Recou! ent : T+e 3o$$"!"'" y o Reco p%e, Te$ &$ +e ,&%e "%p'"e$/

$&y$ +& +ere $+o '* !e & po$$"!"'" y or +e e, erpr"$e o recover " $ 'o$$e$ o +e "," "

p+&$e o +e p'&, & $o%e po", o "%e. I, Broo e ro p L *. D. Bro-, &,* F"''"&%$o,To!&cco orp 28/ +e o r $ +e'* +& o +o'* &, e, erpr"$e # "' y o pre*& ory pr"c",#/ "

% $ !e $+o-, +& +ere "$ re&$o,&!'e po$$"!"'" y o reco p%e, . +er$: F"''"&%$o,

p I,cre&$e R 'e29/ *au ol 'rice Re3ersal Rule 45/ Rule o1 Reason A!!roach &re

2 &$e @62G86/ AK +e%"e BD v. o%%"$$"o, (1991)E R I@?? 9

2 09 .S. 209 (199?)90

29 '"ver E. F"''"&%$o,(19C9)/ o%%e, &ry: F"''"&%$o, o, 3re*& ory 3r"c",# II/ T+e Y&'e L&- o r,&'/88 (6)/ pp118?@1200

": B& %o' (19C9)/ &$"@3er%&,e,ce o 3r"ce Re* c "o,$: A 3o'"cy or 3reve, "o, o 3re*& ory 3r"c",#/88/ T+e Y&'e L&- o r,&'.

1: | P a g e


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e$ $ -+"c+ ,ever re&''y #&",e* v&'e*"c "o, &,* pop '&r" y. A,o +er e$ "$ +eno+rule test

-+"c+ $&y$ +& +ere "$ ,o +&r* &,* &$ r 'e o *e er%",e pre*& ory pr"c",#.

CO%T MEA%URE% ADO'TED IN INDIAN COM'ETITION LAWT+e I,*"&, co%pe " "o, '&- +&$ &*op e* Avere D&r"&!'e o$ &$ +e &ppropr"& e %e&$ re o

co$ / -+"c+ "$ !y &,* '&r#e +e %e&$ re o co$ &*op e* ", &'' j r"$*"c "o,$. T+ere "$ &

pre$ %p "o, ", %o$ c&$e$ +& -+ere +e e, erpr"$e $e $ " $ $&'e pr"ce !e'o- " $ Avere

D&r"&!'e o$ / " +&$ e,#e* ", & pre*& ory pr"c",# pr&c "ce. Ho-ever/ pr"ce$ &''",# !e -ee,

+e AT &,* AD &re &'$o $ !jec o ",< "ry/ ! ", $ c+ c&$e $pec" "c ", e, -o '* +&ve o

!e $+o-,. 3r"ce$ $e &!ove +e AT &re ,'" e'y o !e c+&''e,#e*. T+e I &'$o +&$ propo$e*

cer &", re# '& "o,$ -" + re$pec o *e er%",",# co$ ", c&$e$ o % ' "@pro* c e, erpr"$e$?1/

o", pro* c $ &,* By@pro* c $?2/ r&,$ er pr"c",#?? / &,* c&p "ve co,$ %p "o,?4. ,ce &

pre*& ory pr"ce &''e#& "o, "$ e$ &!'"$+e*/ +e e, erpr"$e -o '* !e $&"* o +&ve &! $e* " $

*o%",&, po$" "o,. F+ere & er ",< "ry/ +e I ",*$ +& &, e, erpr"$e ", & *o%",&,

po$" "o, "$ ", co, r&ve, "o, o +e prov"$"o,$ o Sec "o, 4/ " %&y p&$$ &,y o +e or*er$

$pec" "e* ,*er Sec "o, 2C o +e Ac &,* %&y r +er ,*er Sec "o, 28 o +e Ac *"rec +e

*"v"$"o, o &, e, erpr"$e e,joy",# & *o%",&, po$" "o, o e,$ re +& $ c+ &, e, erpr"$e *oe$

,o &! $e " $ *o%",&, po$" "o,.

"1 Re# '& "o, .

"2 Re# '& "o, 6.

"" Re# '& "o, C.

"@ Re# '& "o, 8.

11 | P a g e


12/20

$EA%I*ILIT( O$ 'REDATOR( 'RICIN&F+"'e +ere "$ % c+ *"$c $$"o, &,* *e!& e$ #o",# o, or *ec&*e$ &!o +e ," y@#r" y

*e &"'$ o pre*& ory pr"c",#/ %&,y &re o +e op","o, +& " "$ ,o & re&' co,cep / +& "

,o +",# '" e " c&, ever e "$ . T+e %&jor cr" "c"$%$ &",$ +e +eory o 33 %&y !e

• T+e "r$ &,* +e %o$ o!v"o $ re&$o, &$ o -+y +"$ e, "re co,cep "$ o e, cr" "c"$e*

"$ +& / +e co%pe " or$ -+o +&* 'e +e %&r e * r",# +e pre*& "o, p+&$e %&y po

p &", ", +e reco p%e, p+&$e.• A'$o/ +e co%pe " or$ %&y !e $ ro,#er +&, -+& +e pre*& or e pec e* +e% o !e

$ ro,#er +&, -+& +e pre*& or e pec e* +e% o !e &,* %&y & e 'o,#er "%e o

'e&ve +e %&r e +&, e pec e*/ +e,ce pro'o,#",# +e p+&$e o pre*& "o,/ 'e&*",# o

$ c+ 'o$$e$ &$ c&,,o !e reco pe* or &$ -o '* r, +e pre*& or " $e' !&, r p .• Moreover/ j $ !ec& $e & "r% "$ !&, r p & o,e po", o "%e *oe$ ,o re&''y

# &r&, ee +& +ey -"'' orever !e $o. To #"ve &, e &%p'e/ T+e F&$+",# o, 3o$

-e, !&, r p ", 19?? or $o%e re&$o,$. B " $ -or orce &,* #oo*-"'' re%&",e*.

No o,'y +& / " $ p !'"$+er E #e,e Meyer &c< "re* every +",# & & % c+ 'o-er pr"ce

+&, !e ore &,* eve, &''y/ -e, o, o c'"%! +e '&**er o $ cce$$ &",.• A' er,& "ve'y/ eve, " +e preye*@ po, "r%$ -e, !&, r p / o +er "r%$ co '*

p rc+&$e +e"r &c"'" "e$ &,* co%pe e -" + +e &''e#e* pre*& or ? . S c+ &c< "$" "o,$ o

+o$e !&, r p "r%$ -"'' !e & & very 'o- pr"ce &,* +e,ce +e &c< "r",# "r% %&y

o er very 'o- pr"ce$ oo/ $o % c+ $o/ +& " %&y eve, !e &!'e o o er 'e$$er pr"ce

+&, +e pre*& or.• 3r&c "c&''y $pe& ",#/ " "$ oo'"$+ o e pec +& &'' +e co%pe ",# "r%$ -o '* j $

o,e !y o,e r, !&, r p &,* 'e&ve +e %&r e -" +o eve, ry",# o e%p'oy &,y

co , er@$ r& e#y. ,e $ c+ co , er@$ r& e#y %&y !e %er#er$ &%o,#$ +e%.• A,o +er very ", ere$ ",# pro!&!"'" y %&y !e +& +e co,$ %er$ %&y $ oc p o, +e

pro* c or $erv"ce * r",# +e pre*& ory p+&$e ' re* !y +e e ce$$"ve 'o- pr"c",#/ or

&, "c"p& ",# & pr"ce@r"$e & er $o%e "%e. I +& "$ +e c&$e/ +e, -+e,ever

pre*& or -"'' ",cre&$e +e pr"ce$/ +e *e%&,* -"'' &'' &$ +e co,$ %er$ -"'' &'re&*y

+&ve & $ rp' $. I +e pre*& ",# e, erpr"$e r"e$ o &**re$$ +"$ *" "c ' y !y '"%" "

"' T+e My + o 3re*& ory 3r"c",#/ T+o%&$ . 7"Lore, oT+o%&$ . 7"Lore, o +o'*$ +e Sco L. 3ro!&$co/ r./+&"r o 5ree E, erpr"$e & +e ,"ver$" y o Te,,e$$ee & +& &,oo#&.

12 | P a g e


13/20

$ pp'y/ +e, &'$o " -"'' ,o $ ccee* &$ +e, +e co%pe " or$ -+o +&* 'e +e %&r e

-"'' co%e ", o $ pp'y r +er < &, " "e$.

Then the question arises that i1 the !redatory !ricin" is an ar2itrary conce!t6 why is this

still 2ein" liti"ated u!on#

I +&$ !ee, e$ "%& e* +& +e &vere co$ o & %&jor corpor& "o, o '" "#& ",# & pre*& "o, c

?0 %"''"o,. ?6

3re*& ory pr"c",# "$ o e, & -e&po, $e* ,o !y & *o%",&, "r%/ ! ", &c / &",$ & *o%",&,

"r% or $%&''er e, erpr"$e$ j $ o ,*er%",e +e rep & "o,/ ",cre&$e co$ $ !y & &c+",# +e co$

o '" "#& "o,. A "%e$ $ c+ c&$e$ %&y &'$o !e &!'e o re$ r&", +e *o%",&, "r% ro% &c &

o er",# very 'o-@pr"ce$. B +"$ "$ &,y +",# ! %&", &",",# co%pe " "o,/ r& +er " $ " 'e

co%pe " "o,. 5"'",# &, &, " r $ '&-$ " "$ & co%%o, &' er,& "ve o co%pe ",# !y c ",# pr"ce$ or

"%prov",# pro* c < &'" y/ or !o +?C. Le#&' re$ r"c "o,$ o, pr"ce c ",#/ ", +e ,&%e o

co%!& ",# pre*& "o,J/ &re ",ev" &!'y pro ec "o,"$ &,* &, "@co,$ %er ?8.

So%e o +e e, erpr"$e$ &",$ -+o% 3re*& ory 3r"c",# &''e#& "o,$ +&ve !ee, !ro #+ &re

M"cro$o Sec r" y 3ro* c $/ F&'%&r / 5r&,ce Te'eco%GF&,&*oo/ &%& o,.co% e c.

COM'ARI%ON O$ T-E LAW IN DI$$ERENT 7URI%DICTION% WIT-RE$ERENCE TO %OME CA%E%

U8%8) ", +e c&$e o Broo e ro p v. Bro-, OF"''"&%$o, To!&cco/ 199?/ " -&$ o!$erve* !y +e

.S. S pre%e o r +& pre*& ory pr"c",# "$ &, "rr& "o,&' pr&c "ce &,* +e '&-$ *e$"#,e* o

", 5r&, E&$ er!roo (1981)/ 3re*& ory S r& e#"e$ &,* o , er$ r& e#"e$/ ,"ver$" y o +"co L&-

Rev"e-/ 48/ pp??4.

" T+e My + o 3re*& ory 3r"c",#/ T+o%&$ . 7"Lore, oT+o%&$ . 7"Lore, o +o'*$ +e Sco L. 3ro!&$co/ r./+&"r o 5ree E, erpr"$e & +e ,"ver$" y o Te,,e$$ee & +& &,oo#&.

" H&ro'* 7e%$e (1982)/ B&rr"er$ o E, ry/ A%er"c&, Eco,o%"c Rev"e- C2 pp 2@ 6.

1" | P a g e


14/20

preve, " o,'y ",+"!" co%pe " "o,. He,ce " c&, !e $&"* +& +e .S. o r $ &re re' c &, o

&,y pr&c "ce o 'o-er",# o +e $e''",# pr"ce &$ & c&$e o pre*& ory pr"c",#.

Sec "o, 2 o +e S+er%&, Ac $ & e$: Every per$o, -+o $+&'' %o,opo'" e/ or & e%p o

%o,opo'" e/ or co%!",e or co,$p"re -" + &,y o +er per$o, or per$o,$/ o %o,opo'" e &,y p&r o +e r&*e or co%%erce &%o,# +e $ever&' S & e$/ or -" + ore"#, ,& "o,$/ $+&'' !e *ee%e* # "' y

o & e'o,y/ &,*...J. T+"$ $ec "o, &**re$$e$ +e &c "o,$ o $",#'e "r%$ +& %o,opo'" e or & e%p

o %o,opo'" e &$ -e'' &$ +e co,$p"r&c"e$ &,* co%!",& "o,$ +& & e%p o %o,opo'" e.?9

E8U .: +e re'ev&, '&- o, +"$ po", ,*er +e E. . '&- "$ o ,* ,*er Ar "c'e 82 o +e Tre& y o

+e E rope&, o%% ," "e$. T+e AK 40 c&$e e$ &!'"$+e* +& pr"c",# !e'o- &vere o &' co$ "$

pre*& ory &,* " -&$ &'$o &ccep e* ", +e c&$e oMichelin 38 Co ission 9: +& & *o%",&,

,*er & ",# +&$ re$po,$"!"'" y ,o o &''o- " $ co,* c o "%p&"r co%pe " "o,. B " "$ &'$o o !e,o e* +& ", +e ," e* Br&,*$42 c&$e/ " -&$ +e'* +& +e *o%",&, ,*er & ",# "$ e, " 'e* o

& e re&$o,&!'e $ ep$ o pro ec " $ co%%erc"&' ", ere$ $ oo. He,ce/ +ey & e & r 'e o re&$

&ppro&c+ &,* -e"#+ +e v&r"o $ p&r&%e er$ o re&c+ & *ec"$"o, o, pre*& ory pr"c",#.

INDIA : 3re*& ory 3r"c",# "$ *e ",e* !y +e Ac &$ +e $&'e o #oo*$ or prov"$"o, o $erv"ce$/ & &

pr"ce -+"c+ "$ !e'o- +e co$ / &$ %&y !e *e er%",e* !y re# '& "o,$/ o pro* c "o, o #oo*$ or

prov"$"o, o $erv"ce$/ -" + & v"e- o re* ce co%pe " "o, or e'"%",& e +e co%pe " or$.4?

"9 Spec r % Spor $ I,c. D. Mc "''&, 06 S 44C (1992)

@: &$e @62G86 A +e%"e BD v. o%%"$$"o, P1991QE R I@?? 9

@1 &$e ?22G81 M"c+e'", v. o%%"$$"o, P198?Q E R ?461

@2 &$e 2CGC6 ," e* Br&,*$ v. o%%"$$"o, P19C8Q E R 20C.

@" Sec "o, 4/ E p'&,& "o,/ T+e o%pe " "o, Ac / 2002.

1@ | P a g e


15/20

I,*"& +&$ &*op e* AD &$ +e $ &,*&r* o %e&$ re pr"ce pre*& "o,44. T+e o%%"$$"o, &'$o +&$

+e *"$cre "o, o &*op ",# &,y o +er co$ $ &,*&r* ($ c+ &$ &vo"*&!'e co$ / 'o,# r , ",cre%e, &'

co$ / or %&r e v&' e)/ " " co,$"*er$ *o",# $o ".4

I, +e M c&$e ", I,*"&46

/ M &''e#e* +& NSE -&$ pr&c "c",# pre*& ory pr"c",# ", +e or%o -&"ver o r&,$cr"p "o, ee/ &*%"$$"o, ee &,* *& & ee* ee. T+e 7 o ,* NSE ",*ee* -&$

&! $",# " $ *o%",&,ce. NSE co , ere* o, -o #ro ,*$@ +& +ere -&$ ,o co,cre e ev"*e,ce o

$+o- +e ", e, o *o $ c+ &, &c +& $ c+ 'o- pr"c",# -&$ & pro%o "o,&' po'"cy or +e ,&$ce,

%&r e &,* +e,ce ,o pre*& ory. NSE &'$o c'&"%e* +& +ey -ere o er",# +e ero pr"c",# po'"cy

&$ " $ co$ $ -ere ero.

T+e I o ,* NSE o !e &! $",# " $ *o%",&, po$" "o, !ec& $e +& p&r "c '&r $e#%e, o +e

%&r e -&$ ,o 'o,#er ", +e ,&$ce, $ e; r& +er " -&$ ", " $ ", &, $ e. A'$o +e 7 >$ ",*",#$re#&r*",# +e co$ $ $+o-e* +& " -&$ ,o ero.

Ho-ever/ " "$ ", ere$ ",# o ,o e +& +e I *"* ,o co,$"*er +e pr"c",# o !e =pre*& ory> ", +e

$ r"c $e,$e o +e er%. I,$ e&* " -&$ co,$"*ere* o !e = , &"r>4C &,* po$$"!'e o,'y !y v"r e o

" $ *eep poc e $48 &,* co '* ,o !e $ $ &",e* !y " $ co%pe " or$.

T+e o%%"$$"o, r +er co%%e, e* +& " eve, ero pr"c",# !y *o%",&, p'&yer c&,,o !e

", erpre e* &$ , &"r/ -+"'e " $ co%pe " or "$ $'o-'y !'ee*",# o *e& +/ +e, +"$ o%%"$$"o,

@@ Re# '& "o, ?/ T+e o%pe " "o, o%%"$$"o, o I,*"& (7e er%",& "o, o o$ o 3ro* c "o,Re# '& "o,$)

@' "!"*

@, &$e No. 1?G2009/ M S oc E c+&,#e L *. v. N& "o,&' S oc E c+&,#e o I,*"& L *./ (2? 'y/2011).

@ A$ per Sec "o, 4 o +e o%pe " "o, Ac / 2002/ pre*& ory pr"c",# "$ & $ !$e o = , &"r> pr"c",#.Ho-ever/ ,'" e =pre*& ory pr"c",#> -+"c+ "$ *e ",e* ", +e e p'&,& "o, o Sec "o, 4/ +e er% = , &"r

pr"c",#> +&$ ,o !ee, *e ",e* ", +e Ac / &,* ,ee*$ o !e *e er%",e* &$ per +e &c $ &,* c"rc %$ &,ce$ oe&c+ c&$e.

@ S pr& 46.

1' | P a g e


16/20

-o '* ,ever !e &!'e o preve, &,y or% o , &"r pr"c",# ",c' *",# pre*& ory pr"c",# ",

reJ49.

Certain cases)AK;O 38 Co ission 05

I, AK c&$e +e co%%"$$"o, *"* ,o pre$cr"!e &,y $pec" "c pr"ce r 'e$ '", e* o co$ $ r& +er "

co,ce, r& e* o, +e o!jec "ve$ o & *o%",&, co%p&,y o! &",e* ro% +e ev"*e,ce o! &",e* !y

+e co%%"$$"o,.1 T+e co%%"$$"o, *ec"$"o, ",*",# pre*& "o, oc $e* o, AK >$ +re& $ &,* " $

e'"%",& ory ", e, . I $ & e* ", " $ j *#%e, +& / ", &pp'y",# +e Ho %&,,@L&@Roc+e pr",c"p'

o AK pr"c",# / " -&$ o !e pre$ %e* +& pr"ce$ c+&r#e* +& -ere 'o-er +&, AD &'o,e

-ere ", e,*e* o e'"%",& e co%pe " or$ $",ce +ey -o '* !e ,ece$$&r"'y 'o$$ %& ",#. 2 A'$o eve,

pr"ce$ &!ove AD ! !e'o- AT &re co,$"*ere* o !e pre*& ory " " -&$ & p'&, o *e'"!er& e'y

e'"%",& e & co%pe " or . ?

*roo?e &rou! Ltd8 38 *rown @ Willia son To2acco Cor!8 09

I, +"$ c&$e +e S S pre%e o r +e'* +& !e'o- co$ pr"ce$ c&, !e pre*& ory ", ,& re o,'y "

+e *o%",&, ,*er & ",# +&* & re&$o,&!'e pro$pec o $ !$e< e, 'y reco p",# " $ *e'"!er& e'y

@9 S pr& 46.

': S pr& 40.

'1 o&,,& oy*er &,* A'!er ",& A'!or$@L'ore,$/ oy*er>$/ pp?20.

'2 R"c+&r* F+"$+/ o%pe " "o, L&-/ or* 3 !'"c& "o,/ ppC?1@C?2.

'" "!"*

'@ &$e No. ???G94 P1996Q E R I@ 941.

1, | P a g e


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",c rre* 'o$$e$. I " *"* ,o / +e %&r e " $e' -o '* p ,"$+ +e pr"ce c er$; +ere -o '* !e ,o

,ee* or &,y ", erve, "o,. 6I '&"* o & c'e&r -o@ "er po'"cy or j *#",# pre*& ory pr"c",#.C

Tetra 'a? International %A 38 Co ission0

T+"$ "$ & c&$e -+ere +e *o%",&,ce &,* &! $e &re o, *" ere, %&r e $. I, +"$ c&$e +e

co%%"$$"o, +e'* +& Te r& 3& +&* &! $e* " $ *o%",&, po$" "o, o, +e &$ep "c %&r e !y "

co,* c o, +e ,o,@&$ep "c %&r e -+"c+ -&$ *e$"#,e* o o! &", & co%pe " "ve &*v&, e o, +e

,o,@&$ep "c %&r e .9

Deutsch 'ost A& B5

I, 7e $c+ 3o$ +e co%%"$$"o, &pp'"e* &, ",cre%e, &' co$ $ &,*&r*/ ",$ e&* o +e AK AD

+re$+o'*/ -+e, " *e&' -" + & $ & ory %o,opo'"$ -+"c+ -&$ &'$o &c "ve o, & co%pe " "ve

%&r e . T+e 7e $c+ po$ +",*er$ co%pe " "o, !y cro$$ $ !$"*" ",# co%%erc"&' p&rce' $erv"ce$

+ro #+ +e re$erve* 'e er po$ $erv"ce$.61

'' E #e,e B "#"e#/ pp1C8@1C9.

', I, +o'*",# +& reco p%e, "$ &, e$$e, "&' e'e%e, o +e e$ or pre*& ory pr"c",# +e S pre%e o r(& pp226) o!$erve* +& =c ",# pr"ce$ ", or*er o ",cre&$e ! $",e$$ o e, "$ +e very e$$e,ce oco%pe " "o,>.

' F. K"p D"$c $"/ o$ep+ E./ H&rr",# o,/ R o+, M/ Derco,"/ pp?04.

' &$e No. ???G94 P1996Q E R I@ 941.

'9 A'"$o, o,e$ &,* Bre,*& S ",/ pp4 6@4 C.

,: L 12 G2C/ P2001Q MLR 99.

,1 S pr& 9.

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Matsushita 38 ;enith Radio Cor!8 B/

,*er +"$ c&$e +e S pre%e o r +&$ rejec e* +e c'&"%$ %&*e !y e," + R&*"o orp. +e o r

+e'* +& +e "r%$ c+&r#e* -" + pre*& "o, *oe$ ,o po$$e$$ & 'o o %&r e po-er &,* +ere "$ ,o

po$$"!"'" y o reco p%e, o 'o$$.

CONCLU%ION AND %U&&E%TION%3re*& ory 3r"c",# "$ & very perp'e ",# &,* p '",# op"c or +e &, "@ r $ co%% ," "e$ o %&,y

co , r"e$. r" "c$ o pre*& ory pr"c",# &r# e +& " "$ ,o & r& "o,&' $ r& e#y o !e p r$ e* !y

"r%$. T+e pro!'e% "$ +& " "$ very +&r* o *"$ ",# "$+ pre*& ory pr"c",# ro% o +er *e$"r&!'eco%pe " "ve pr"ce c ",#. T+e &, " r $ '&-$ $+o '* &*e< & e'y c r! +e pre*& ory pr"c",#

-" +o over'y *e err",# co%pe " "ve pr"ce c ",#.

A, " r $ co r $ $+o '* %& e $e o +e eco,o%"c ev"*e,ce$ ", *e ec ",# pre*& ory pr"c",#. A'$o/

eco,o%"c ev"*e,ce$ &re ,o- &!'e o $+o- +e r& "o,&'" y o pre*& ory pr"c",# '" e +e po$$"!"'" y

o reco p%e, -+"c+ "$ &, e$$e, "&' e'e%e, ", *e er%",",# +e r& "o,&'" y o pre*& ory $ r& e#y

o & "r%.

I "$ &'$o ,ece$$&ry or +e &, "@ r $ & +or" "e$ o %& e $ re +& +e %&r e $ r c r

+e pro$pec $ o pre*& ory pr"c",#. T+"$ re< "re$ & co%p'e &,&'y$"$ o +e %&r e $ -+ere

&, "co%pe " "ve e ec $ +&ve occ rre* or &re pro!&!'e. T+"$ ",c' *e$ *e ",",# +e *o%",&,ce o

+e pre*& ory "r%/ +e !&rr"er$ o e, ry/ &,* +e %&r e po-er o +e co%pe " or$.

A er +e e, "re re$e&rc+ " c&, !e co,c' *e* $&y",# +& pre*& ory pr"c",# "$ & very co%p'e %"

o $" & "o,$/ ", e, "o,$ &,* &cco , $. I "$ "%po$$"!'e o &*+ere o &,y o,e or %ore o +e

pr&c "ce$ e$ $ &$ & co,c' $"ve e$ o prove pre*& ory pr"c",#. I, &c &'' +e e$ $ e%p'oye* &

%ere'y ",*"c& "ve.

I "$ r e +& p&r $ o +e e "$ ",# +eory "$ pr&c "c&' ! +e e, "re +eory o pre*& ory pr

",c' *",# +e pre*& "o,/ !&, r p cy o &'' o +er "r%$/ o! &",",# co%p'e e %o,opo'y over

re'ev&, %&r e / ,o re@e, ry o &,y o +e prev"o $ "r%$ or e, ry o ,e- "r%$ ", +e reco p%e,

p+&$e &,* ",&''y reco p%e, o &'' 'o$$e$ "$ ,o +",# 'e$$ +&, & &, &$y.

,2 4C .S. C4 (1986).

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B +&v",# $&"* $o/ " c&,,o !e *e,"e* $&y",# +& cer &", e'e%e, $ o pre*& ory pr"c",# &re $ee,

", +e %&r e &,* +&ve " $ +&r% ' "%p&c $. So eve, +o #+ +e +eory "$ &pp'"e* ", p&r $/ ", "

e, "re y/ " "$ ,o +",# %ore +&, & &'$" y.

*I*LIO&RA'-(

• M&+er M 7&!!&+; E &,* K o%pe " "o, L&-/ o%%e, &ry/ &$e$ &,* M& er"&'$;

&%!r"*#e ,"ver$" y 3re$$.• o&,,& oy*er &,* A'!er ",& A'!or$; L'ore,$/ oy*er>$ E o%pe " "o, L&-; or*

,"ver$" y 3re$$.• 7or"$ H"'*e!r&,*; T+e Ro'e o Eco,o%"c A,&'y$"$ ", +e E o%pe " "o, R 'e$; K' -er

L&- I, er,& "o,&'.• I,*"&, o%pe " "o, Ac /2002•

R"c+&r* 3o$,er (2001); A, " r $ L&-: A, Eco,o%"c 3er$pec "ve; 2,*

e*,; ,"ver$" y o +"co 3re$$.

• F. K"p D"$c $"/ o$ep+ E. H&rr",# o,/ R o+,/ M. Der,o,"; Eco,o%"c$ o Re# '& "o,

&,* A, " r $ ; MIT 3re$$.• T+e My + o 3re*& ory 3r"c",#; T+o%&$ . 7"Lore, o.• 5r&, E&$ er!roo (1981); 3re*& ory S r& e#"e$ &,* o , er$ r& e#"e$; ,"ver$" y o

+"co L&- Rev"e-.• T+e S+er%&, Ac .• R"c+&r* F+"$+; o%pe " "o, L&-; or* 3 !'"c& "o,.• E #e,e B "#"e#; E o%pe " "o, L&-; Fo' er$ K' -er L&- &,* B $",e$$.• R"c+&r* L",*!er#; T+e A%!"# " y o 3re*& ory 3r"c",#: S r& e#y &$ & '&r" "er.• Aree*& &,* T r,er (19C ); 3re*& ory 3r"c",# &,* Re'& e* 3r&c "ce$.• o r,&' &r "c'e !y re# Le B'&,c; R&,* o r,&' o o%pe " "o, L&-; S"#,&''",# S re,# +;

L"%" 3r"c",# &,* 3re*& ory 3r"c",#.

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Predatory Pricing as an Abuse of Dominan

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