INTERNATIONAL: USA / EUROPEAN UNION - COMPETITION POLICY - ABUSE OF DOMINANCE - MARGIN SQUEEZES - COMPARISON

USA/EU: The convergence and specifics of EU competition law and American antitrust law regarding the prohibition of price scissors as constitutive of abuse of dominance

In this paper, the author reports on how the European and American Competition Authorities apprehend margin squeeze, viz. the fact for dominant undertakings operating simultaneously as vertically-integrated entities and as downstream market participants to increase wholesale prices by reducing their retail price, thus squeezing their downstream-market competitors out. This is significant because the address of margin squeeze as distortive of competition differs significantly on either side of the Atlantic while it is a major concern for non-dominant competitive economic operators. The divergences demonstrated in this article further attest to a fundamental opposition between EU Competition Law and American Antitrust Law which should be of interest to readers in the areas of competition law and economics.

Introduction 1. Margin squeezes, also known as price scissors, are at the core of the Commission’s Article 102 TFEU policy. [1] Both terms denote instances where a dominant undertaking operating simultaneously as a vertically integrated entity and as a downstream market participant increases wholesale prices by reducing its retail price, thus squeezing its downstream-market competitors out. [2] In the eyes of the Commission, those practices “constitute anticompetitive conducts especially where other providers are excluded from the competition on the downstream market even if they are at least as efficient as the established operator.” [3] 2. The European Competition Authorities (“ECA”) consider a margin squeeze to have been implemented when it can be said that the dominant undertaking

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Kane Abry-Diaw de Baye, USA/EU: The convergence and specifics of EU competition law and American antitrust law regarding the prohibition of price scissors as constitutive of abuse of dominance, May 2019, Concurrences Review N° 2-2019, Art. N° 89963, www.concurrences.com

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