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EUROPEAN COMMISSION DG Competition - page 50 / 113





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eliminate or discipline the rival in question and thereby have a negative effect on (the growth of) competition in the market. INDIRECT EVIDENCE OF A PREDATORY STRATEGY

Examples of Indirect Evidence 115. In case there is no direct evidence of a predatory strategy a case will have to be built on indirect evidence of such a strategy to predate. In arguing such a case the following elements will in particular be of relevance to show a plausible scheme of predation: does the pricing behaviour only make commercial sense as part of a predatory strategy or are there also other reasonable explanations, is there an actual or likely exclusionary effect, the scale, duration and continuity of the low pricing, does the dominant company actually incur specific costs in order for instance to expand capacity which enables it to react to entry, are certain customers selectively targeted, is there concurrent application of other exclusionary practices, does the dominant company have the possibility to off-set its losses with profits earned on other sales, does it have the possibility to recoup the losses in the foreseeable future through (a return to) high prices, can predation on one market have a reputation effect on other markets, is the prey particularly dependent on external financing and does the prey have counter strategies. The relevance of the different elements for individual cases may not always be the same and it is not possible to define in the abstract and in advance what is exactly required in an individual case to show a predatory strategy with such indirect evidence. However the following can be said on the importance of the various elements.

If makes commercial sense only if part of predatory strategy 116. If the pricing behaviour only makes commercial sense as part of a predatory strategy and there are no other reasonable explanations, such will normally suffice to show a strategy to predate, certainly if also other exclusionary practices are applied by the dominant company. In such a case it will not be necessary to show that a foreclosure effect is likely.

In other cases

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