Brief Analysis On Just Cause In Determination On Price Discrimination

According to China’s anti-monopoly law, in the process to determine pricediscrimination, after proving that specific behavior is consistent with the basicelements of price discrimination, it is necessary to analyze the just cause factor toprove that the behavior doesn’t have just cause to begin or continue. China’santi-monopoly regulations, theoretical research and law enforcement experience lackof abstract analysis of the objectives and significance of the just cause factors, as wellas the criterion to determine. So it is necessary to study the just cause factor in processto determine the price discrimination. In addition to the Introduction and Conclusion,this article divides into six parts to discuss and study the just cause factor in process todetermine the price discrimination.The first section introduces market background and behavior performance in thecase of Telecom, Unicom to suspected monopoly. In the case of Telecom and Unicom,there is no appropriate analysis and judgment on the viewpoints in just cause factor.This may have bad influence to conclude a reasonable, just judgment which will playa role as precedent to guide the market operations and law enforcement.The second section summarizes the connotation and extension of pricediscrimination in the antitrust law to reveal the nature of price discrimination, seriousanti-competitive effects. It is needed to analyze the widespread existence and positiveeffects of the price difference. Based on the study of regulations and classification of price discrimination, it is easy to conclude that reason and purpose of the antitrustlaws to regulate price discrimination is to eliminate the serious anti-competitiveeffects.The third part analyzes the basic elements and general logic to determine pricediscrimination, and thus leads to just cause factor in process to determine the pricediscrimination. Referred to the economic theory, antitrust law sets several elements toanti-competitive effects. But before application, it is important to consider thatbehavior may have multi-effects. If the antitrust law prohibits the behavior because ofits anti-competitive effects, the beneficial effects of the behavior can’t come true atthe same time. The just cause factor aim at proving the justice of application orenforcement of antitrust law on specific behavior from the term of comparing multipleeffect of the behavior.The fourth section explores the value and criterion of just cause factor. Just causeis a necessary factor to determine price discrimination to appropriately lean toeconomic efficiency value and to avoid the shortage of antitrust law enforcement. Tojudge the claim as just cause is to analyze and compare the anti-competitive effects,the beneficial effect and the relative importance between them, to weigh the objectiveto maintain competing and the efficiency value in specific case. Referred to theEuropean Union enforcement guidelines, the measure principle and restrictiveconditions of just cause can be summarized: Just cause should prove that beneficialeffect to increase efficiency is the main effect of specific behavior, at the same timeanti-competitive effects of specific behavior is small and unavoidable "side effects".The fifth section studies the main situation as just causes, including the costdifference, specific market condition and improvement in social and public interests,and tries to use the theoretical analysis in Telecom and Unicom case to comment onclaims in just cause factor. It is useful to summarize the general content of eachsituation and to analyze the reason why these situations can be recognized as justcause under certain circumstances: They can avoid unnecessary waste of resources orimprove efficiency or social and public interests. In addition, it is also meaningful todiscuss why good intention claims can’t constitute just cause. It is proven that the legitimacy of behavior and justice of antitrust enforcement should be measured withthe relationship between positive efficiency and anti-competitive effects of thebehavior.The sixth section summarizes the path to determine the just cause and proposalsto apply the criterion and analyzing path into reality case. There are two questions toanswer in order to determine the just cause: first is whether the claim can bereasonable established, second is whether the efficiency-improved effect andanti-compete effect of the behavior can be consistent with relevant criterion.