The Antitrust Assessment Of Predatory Pricing

Predatory pricing is a kind of behavior that abuse market dominant position and make the price below cost. This kind of behavior deprives the rights of other competitors and damages consumers’and public interests. Because the damages of predatory pricing cause the attention of many countries, predatory pricing is prohibited under the antitrust law.With the development of society and the social division, the market economy becomes more complexed. It is very hard to distinguish enterprise’s predatory pricing and normal price competitive behavior. Predatory pricing in the antitrust law becomes a complex and difficult legal system. Generally, predatory pricing has the following elements:first of all, only the incumbent has the ability to implement predatory pricing. Predatory pricing captures monopoly profits by raising prices after the exclusion of peer competitors. Enterprises without a dominant market position sell goods below cost can not have a similar effect of incumbent businesses and repel competition and cause damage to the consumers, which is not subject to antitrust law regulation. Secondly, price is below cost. The nature of business is the pursuit of profit. Therefore, price below cost is not rational and economical on the surface. But the act was intended to exclude competition through opponent and obtain greater monopoly profits. Finally, predatory pricing must have the possibility of compensation. Enterprises implement predatory pricing is at the expense of creating loss in the early days. The fundamental purpose is to compensate by raising price. American judicial practice of predatory pricing criteria keeps a long time. Jurists and judges are very concerned about predatory pricing standards. The United States has established several different criteria through case law. It was initially concerned about whether a company has a monopoly motivation; Areeda&Turner make price—cost tests as an important criterion; Compensation test has been established in the case of Brooke Group. The exploration of predatory pricing history tells us that predatory pricing decision criteria are not isolated and unchanging. Any country includes China must consider their specific situation in regulation of predatory pricing.