I. A recent and complex concept 1. A side-effect of deregulation 1. According to the Court of First Instance, a margin squeeze arises when a vertically integrated firm sells an upstream good to non-integrated downstream rivals at a price which cannot leave “an efficient competitor”1 “a sufficient profit margin [...] to remain competitive”2 in the downstream market, given the price set by the integrated firm for its own downstream product. In such a situation, non-integrated downstream rivals are “squeezed” between the integrated firm's upstream and downstream prices. 2. There has been a recent flurry of margin squeeze cases at the Community and national levels in the aftermath of the deregulation of former state monopolies in sectors such as energy, telecommunications, and water.3 Lively
DROIT & ECONOMIE : CISEAU TARIFAIRE - ENTREPRISES VERTICALEMENT INTEGREES - ANCIENS MONOPOLES PUBLICS - CONCURRENTS NON INTEGRES - COMBINAISON DE PRIX AMONT ELEVE ET PRIX AVAL BAS - PRIX EXCESSIF - PRIX PREDATEUR - REFUS DE VENTE - VENTE LIEE - COMPORTEMENT DISCRIMINATOIRE - COHERENCE DU TRAITEMENT DE DIFFERENTS ABUS - ARTICLE 82 - "POST-CHICAGO" - TESTS COMPTABLES
Some economics of margin squeeze
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