OECD Journal: Competition Law and Policy

  • Discontinued

This journal draws on the best of the recent work done for and by the OECD Committee on Competition Law and Policy. Its articles provide insight into the thinking a competition law enforcers, and focus on the practical application of competition law and policy. Here’s what Robert Pitofsky, Chairman of the US Federal Trade Commission said about this new journal when it was launched: “Global competition is the wave of the future, and comparative analysis of the laws and practices of various members of the worldwide community of nations is a necessary corollary. This new OECD Journal of Competition Law and Policy, compiled from OECD Round Table discussions, summaries of recent developments, and articles on topics of special interest, will introduce regulators, practitioners, and scholars to different regulatory approaches around the world and will allow us to consider in a more informed way the strengths and weaknesses of our own systems.”

Now published as part of the OECD Journal package.

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Predatory Foreclosure

Dominant firms can use various strategies to eliminate or deter competition, including unlawful price cuts or “predatory pricing”. That strategy involves a willingness to absorb losses in the near term that are rational only because they lead to greater profit in the longer term, after competitors have been disciplined or eliminated. Despite differences in statutes across jurisdictions, the roundtable discussion held in October 2004 in the Competition Committee quickly revealed a virtually unanimous view that the purpose of competition laws is to protect and promote competition, not competitors. With respect to methods for detecting predatory prices, including price-cost tests, there was a greater diversity of views because different cost measures are appropriate in different situations. There was broad agreement among Members that investigations should include an examination of whether an alleged predator would likely be able to recoup its predatory losses, with a negative finding indicative of a low probability of harm to competition.

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