Regulation Of Predatory Pricing Law

In order to drive out equally efficient or more efficient competitors in the same market, the enterprise which occupies the controlling position continues selling commodities (or providing labour service) with the price which is lower than its cost without a reasonable cause.After its existing competitors have been driven out of the market, and its potential competitors do not dare to enter the market, the enterprise changes to make its prices of commodities (or services) high enough to make up for the loss of sales during the previous period and to obtain high monopoly profits. This behavior is called predatory pricing. By definition, we can see:Firstly, the main body of predatory pricing must have controlling position; Secondly, the enterprise tries to drive out competitors intentionally; Thirdly, the enterprise in the market continuously to sell commodities or provide services below cost sales.Fourthly, predatory pricing is aimed at existing and potential competitors with the same efficiency and even more efficiency .These four parts are necessary elements of predatory pricing.Bing based on the analysis, it is not difficult to find that the nature of predatory pricing refers to competitive restriction behavior, illegal investment behavior and short-term sexual strategy restriction behavior based on price adjustments.These three aspects of nature make author think of the optimization of the legal regulation of predatory pricing, so that the effective competition theory, the cost-price theory and three big "plundering model" theory are given.The effective competition theory is the basic theory which is centered on "market structure -market conduct-market performance" paradigm of the analysis of predatory pricing.The cost-price theory is the central theory which is based on the average total cost theory, marginal cost theory and average variable costs theory.The three big "plundering model" theory from the perspective of economics constitutes a supportive theory for the legal regulation of predatory pricing.The three thoeries are included in the legislation and practice of predatory pricing. The author chooses U.S. and European Union which have developed and representative antimonopoly law and makes a comparison with China on legislation and legal application,not only making the deficiencies of China-related legislation clear, but also giving an explanation to the principles, standards and methods of the recognition of predatory pricing,the situations which apply to speaking out in one's own defence,and the legal liabilities. American scholars have made a lot of recognition standards, and the author just selected average variable costs standard, output standand, two-stage standard to introduce briefly.Since 1975,US.courts have adopted many standards during their legal application,from the subjective intent standard,the average variable cost standard,compensation standard,until the standards of diversity and innovation from the beginning of the 21st century.The United States on predatory pricing has not had clear and unified standards so far.The European Union is the same,although the European Union has formed a predatory pricing standard framework that is built by the four formed elements of predatory pricing,but that does not have any specific targets.The author finds a new recognition method which is based on the four formed elements of predatory pricing,taking into account the compensation standard and the output standard.Of course,this method is guided by the recognition principles which are " a proper monopoly is lawful" and "the interests of society as a whole are guaranteed". To a comprehensive analysis of legal application of predatory pricing is not enough,the author put forward the legislation for the defense of predatory pricing in U.S.and china, and sums up the defensive situations into two types: the defensive behavior and the market expansion behavior,laying a foundation for the suggestion in the last part.Besides,the author also discusses the legal liabilities of predatory pricing in the form of civil, criminal, administrative and other traditional types and punitive liability of compensation and other special types.According to the above comparison,considering our existing legislation, especially the "anti-monopoly law",the author put forward four suggestions to improve China's legal regulation of predatory pricing.Firstly,grasp the definition of predatory pricing which the Article 17 of the "anti-monopoly law" and the relative provisions of other law give.Secondly, understand the new recognition method of predatory pricing.Under the guidance of the recognition principles- "a proper monopoly is lawful"and"the interests of society as a whole are guaranteed", considering four formed elements of predatory pricing and taking into account the compensation standard and the output standard.Thirdly, adopt the application principle for the defence of predatory pricing, namely: normal facts are dealed with by Article 11 of "Anti-Unfair Competition Law" in China and defensive behavior and the market expansion behavior which are summed up by the author,but must know there must be some exceptions.Fourthly,in order to solve the defect of China's existing legislation about predatory pricing that is mainly administrative liability,the author suggests increasing the scope of application of civil liability,forming a liability framework in which civil liability leads a critical effect,while criminal, administrative liability are supportive factors and adding punitive liability of compensation.