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EUROPEAN COMMISSION DG Competition - page 51 / 113





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117. In all other cases it is at least necessary to show that a foreclosure effect is likely in view of the scale, duration and continuity of the low pricing before predatory pricing can be

found to exist. In general it will not suffice to show only the likely foreclosure effect. The investigation of more elements is usually necessary before a strategy to predate can be convincingly shown.

If Domco targets specific customers 118. If the dominant company with its low prices selectively targets specific customers and in particular when these customers are the actual customers of one or more particular rivals in the market, this may be an important part of the evidence of a predatory strategy. Such prices can be designed to damage a competitor’s viability and to foreclose the market while limiting the losses incurred by the dominant company to those arising from the targeted sales.72 The same holds in case the low prices are selectively targeted at those customers that might switch to a potential entrant in case entry is imminent. Such evidence may be considered stronger if also other exclusionary practices can be shown. On the other hand, a general price decrease applied to all the output of the dominant company is in general less likely to be part of a predatory strategy. With a general price decrease the dominant company will not have the possibility to off-set its losses with profits earned on other sales and the losses will usually be higher, making recoupment less likely. The latter point about a market wide price decrease may have less force of argument if the market is more prone to pre-emption due to characteristics such as network effects or if the dominant company is active on a number of adjacent markets where predation in one market may help to build up a reputation of being an aggressive competitor for all markets.

Multiple markets or periods 119. To show a plausible scheme of predation it may be necessary to investigate whether the predation and its effects are limited to one market or one period of potential entry or whether the effects may also be felt on other markets or in future periods of possible successive entry. In the latter case of multiple markets or multiple periods it may be rational for the dominant company to ‘invest’ in a reputation of being a ‘rough’ competitor and it may want to sacrifice more profits than what would seem rational if only one market or period is taken into account


Case 62/86 AKZO, cited in footnote 33, paragraphs 81, 114 and 115.

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