In paragraph 31, the DP discusses market share threshold percentages and the
likelihood of each category being
How could a firm with
considered dominant. less than 40% market
Do these thresholds seem share be characterized as
In paragraph 33, the
products” within a market. separate product markets?
discussion paper distinguishes between “differentiated How do “differentiated products” differ from products in
12. Paragraph 44 et seq. discuss the conception of “collective dominance.” When are two or more firms collectively dominant but yet fall outside of Art. 81’s prohibition against cartels?
13. In paragraph 66, the DP indicates that it will evaluate a dominant firm’s conduct based on whether it would tend to exclude a competitor “as efficient” as Domco. If as described earlier, a competitor “as efficient” has similar or lower costs than the
dominant firm then what does that imply dominant firm relative to its own costs? presumably rational dominant firm might act
regarding the prohibited conduct by Why would we be concerned that this way?
14. In paragraph 110, the DP asserts that where pricing is below AAC, the Commission need not establish other elements of predation such as the likelihood of recouping losses sustained by the alleged predatory conduct. Later, in paragraph 122, the DP curiously poses the question whether it is reasonable to assume that the exclusionary effect of the alleged predatory conduct will allow Domco to recoup its losses. The DP then asserts that recoupment is presumed to be possible by the very definition of a “dominant undertaking” and that it is sufficient that the Commission demonstrate the likelihood of recoupment by showing, for example, that factors such as high barriers to entry are present. Why does pricing below AAC establish a presumption that the conduct is predatory, whereas pricing above AAC but below ATC require a sufficient demonstration despite the fact that it is presumably more difficult to recoup one’s losses for pricing below AAC than above it?
In paragraph 121, the DP asserts that profits derived from other markets or
may indicate that pricing. Wouldn’t a
Domco is already recouping profit-maximizing firm set prices
losses attributable to in other markets at a
profit-maximizing level regardless of its losses in the alleged predatory market? In words, how can profit derived in other markets be deemed recoupment
other if, as
presumed, first place?
they are the result of prices set at the rational profit-maximizing level in the Is this really recoupment (which is typically described as profits derived from