Best Practices for Addressing Price and Non-Price Predation in SADC Member States

Transcription

1 Technical assistance to the SADC Secretariat to enhance regional integration and harmonization of competition and consumer policy in the SADC Member States Best Practices for Addressing Price and Non-Price Predation in SADC Member States This and the other best practice guidance documents under the Project focus on the best enforcement and analytical practices that are already applied by SADC competition authorities. Significant attention is given as well to best practices developed elsewhere, which, based on the judgement of the Project Team, our consultations and the End of Project Workshop, should be considered by SADC CAs and stakeholders in the future. The sources for the best practices are often indicated in the references in the main text and in the bibliography of each document. Other sources include the many interactions with competition authority officials during the Project and the previous work of Project Team members and the SADC Secretariat Programme officer. Contents Best Practices for Addressing Price and Non-Price Predation in SADC Member States. 1 Major Lessons and Best Practices for Predation Cases in the SADC Region Introduction to Predation Major Predation Issues for SADC Competition Authorities Seven Questions to be Asked at the Outset and Throughout the Predation Investigation Other Major SADC Issues in Conducting a Price or Non-Price Predation Case Going Beyond the Areeda-Turner Rule Concluding Comment on Cross-Border Predation Bibliography TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

2 Major Lessons and Best Practices for Predation Cases in the SADC Region A successful predation case must provide answers in the affirmative to all of the following four questions at the time of case selection and throughout the investigation. (i) (ii) (iii) (iv) Is the predator in fact losing profits because of its very low predatory price and non-price predation activities? Or is the low price based on lower costs and greater efficiency by the alleged predator? Is recoupment of these lost profits and investments in non-price predation probable or at least considered to be probable by the predator at the time of predatory pricing based e.g. on strategy, marketing and related documents secured from the alleged predator? Or does the economic sense test indicate other reasons why the alleged predator would be charging prices that are below what is considered to be normal? Are equally and more efficient competitors in the relevant market negatively affected through untimely exit, reduced sales, and/or decisions to not enter or re-enter the relevant market? Or is the alleged predation simply forcing out of the market less efficient suppliers that are not price, quality and/or service competitive? Is the long term harm to business customers and final consumers expected to be substantially greater than the short term benefit during the period of price predation? Or will they benefit short term and not be harmed substantially long term, because of entry, re-entry and/or a reasonably competitive and contestable market after predation? Credible evidence of substantial harm to competition and consumers is especially important to opening a predation case and for its successful prosecution. Harm to competitors is not sufficient. Predatory pricing can be particularly harmful to competition and consumers when it is combined with non-predation strategies, called raising rivals costs in the literature. Complaints and allegations on price and non-price predation that would raise few competition concerns in OECD countries will pose greater risks to competition and consumers in the SADC Member States. Therefore, the excellent predation literature from the major OECD competition jurisdictions should be applied with care and caution to SADC predation complaints, allegations and cases in order to take account of the many important differences between SADC Member States and the OECD countries (addressed in another project document). TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

3 1. Introduction to Predation The predation story is quite simple. The alleged violator charges prices that are below marginal or average variable/avoidable cost to business customers and final consumers, and/or makes major investments in a variety of non-price predation strategies. This is done for the sole purpose of becoming the dominant supplier and increasing its market power in the relevant market and perhaps in complementary and related markets. The predator therefore will recoup its earlier losses and investment costs and be able to abuse its market power and dominance by charging super-competitive prices for an extended period after predatory pricing and other predation comes to an end (see e.g. Gangi and Bienen 2010:24). The predation story presumes that, because of barriers to entry created by technology, the government, and/or the predator and other companies, equally or more efficient rivals that are forced to exit because of low predatory prices cannot return later to the market when the predator establishes much higher monopoly or near monopoly prices. Price predation is a good news/bad news story for final consumers. Consumers benefit from very low prices during the predation period but may be harmed by supercompetitive prices thereafter. The price predation story requires competition lawmakers and authorities to find the right balance between encouraging aggressive price competition, discounting and price wars that benefit competition and consumers; while discouraging price predation that provides short term consumer benefit and long-term consumer pain (see e.g. Mazzone and Mingardi 2011). Price predation can cause scepticism and confusion among the business community, media and civil society groups who note the apparent inconsistency that: (i) (ii) on the one hand, competition law has prohibitions against overly high prices in its anticompetitive agreement, merger and abuse of dominance sections; while, prohibiting prices that are considered to be too low in its predatory pricing provisions. Competition law education and training, guidance documents and advisory opinions on specific situations are needed to reduce this confusion. 2. Major Predation Issues for SADC Competition Authorities Price and non-price predation are among the most controversial topics in the competition and industrial organization literatures (see e.g. O Hagan 2000, West 2007 and Sagers 2009). There are important overlaps between abuse of dominance and predation in both the literature and in the competition acts of some SADC Member States and other countries. 1 Nonetheless, it was concluded that predatory pricing and non-price predation should be the subject of a separate best practices project document. There are five reasons for this. 1 Gangi and Bienen 2010, pp TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

4 2.1 Predatory pricing can work under many circumstances found in SADC economies The post-chicago predation literature of the past two decades questions the Chicago School presumption and judicial scepticism in the United States and some other OECD countries that predatory pricing is theoretically weak and almost never successful in practice. This alternative literature describes a large number of real-world situations where selling at below cost can force efficient rivals to exit a market; and where the probability of previous rivals and other potential entrants re-entering or entering the market after the predator raises its prices to near monopoly levels are low. Therefore, recoupment by the predator and super-competitive prices for an extended period are quite possible and under some circumstances highly likely (see e.g. Bolton et al 1999). These dangers are particularly relevant to the SADC region. In many Member States, markets are small and fragmented, government created and other entry barriers and the costs of doing business are high, and incumbents with strong and at times dominant positions have many advantages over potential entrants including preferred access to patient capital from internal and external capital markets. Therefore, rational predation is more likely in the SADC region and many other emerging market economies, compared with the OECD countries (see e.g. Bhattacharjea 2003 and Rawat 2011). These situations are consistent with the long purse story of predation, which associates successful price and non-price predation with distortions in financial markets -- based on information asymmetry in capital markets and the preferred access of large incumbents to government and privately owned financial intermediaries (Tirole 1988, pp ). 2.2 Predatory pricing and non-price predation There is a growing consensus in the competition and industrial organization literature that non-price predation strategies generally called raising rivals costs in the industrial organization literature can be even more effective than predatory pricing in eliminating rivals from the relevant market, and can be combined with predatory pricing in an especially harmful manner to establish and entrench dominant positions. What appears to be a relatively innocuous price war can become much more harmful to competition and consumers when combined with non-price predation strategies. State owned enterprises, business groups, large conglomerates and other larger domestic and foreign companies operating in SADC markets can use their deep pockets and preferred access to financing in order to conduct price and non-price predation, raise rival costs, reduce rivals revenues, foreclose the access of rivals to the best suppliers and distributors, and invest in tangible and intangible assets including in excess physical capacity, patents and other intellectual property rights, aggressive marketing campaigns, and fighting brands. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

5 The purpose of these strategies and investments are to deter future entry, protect and entrench their market power and dominant position, and/or maintain tacit or other collusive arrangements with remaining competitors in the relevant and other markets (see e.g. Fox 2007, Sappington and Sidak 2003a and 2003b and Dutz et al 2000). The risks of predation, adverse competitive effects, and benefits to predators are especially significant in markets where: (i) reputation effects and information asymmetries are important; (ii) information and other transactions costs and the sunk costs of entry 2 are substantial; and (iii) predators are well positioned to exploit their information and reputational advantages and the limited market experience and behavioral biases of final consumers and their smaller business customers and other partners (see e.g. Kreps and Wilson 1982, Milgrom and Roberts 1982, and Scheffman and Higgins 2003). Under these circumstances, recoupment is possible and at times probable, and price and non-price predation is more likely to be beneficial to predators and cause substantial harm to competition and consumers in SADC and other emerging markets than in OECD country markets (Dixit 1980, Church and Ware 2000: Chapter 14, and Rey 1997:24-25). 2.3 Predation and longer-term business objectives The economic and business rationale and benefits from price and non-price predation are more obvious when it is recognized that maximizing profits and shareholder value in the next quarter is only one of many objectives of managers of the modern corporation. Additional longer term objectives such as building market share, gross revenues, the customer base and the company s reputation as an aggressive competitor, as well as surviving for another day, could also be important to SADC predation cases and to understanding the predation and other motives and strategies of companies active in SADC region markets (Uslay et al 2006: and Thomas and Kamp 2006). It should be recognized however that the longer term objectives of businesses and their senior management can result in either predation or more benign strategies. For example, strategies to buy market share in order to achieve management objectives, with no expectation of recoupment, can be confused with predation (Thomas and Kamp 2006). 2.4 Predation complaints from competitors Competition authorities receive many complaints from businesses that are facing aggressive and efficient low price competitors in their markets and believe that they are victims of predatory pricing or other forms of predation. Competition authorities in SADC Member States at a very early stage of their analysis need to learn to differentiate: 2 Sunk costs of an entrant are the tangible and intangible investment costs that cannot be recovered when the company is forced to exit. Because of small enterprise sectors and underdeveloped markets, sunk costs represent a higher proportion of total investment costs in SADC and other emerging market economies compared with the more advanced OECD economies. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

6 (i) (ii) legitimate complaints of predation where there is a strong probability of harm to competition and consumers as well as to competitors (including the complainant); from questionable complaints, which are often more numerous, from companies that are attempting to use competition law in an opportunistic manner to disadvantage a more aggressive and efficient competitor. 2.5 Cross-border price predation Some complaints of price and other forms of predation will come from domestic producers in SADC Member States, that are facing strong price competition from imported goods and services that are produced in other perhaps more developed SADC MS as well as other African and overseas countries. Normally, cases of possible cross-border price predation are addressed under antidumping and other trade remedy laws, where relief to domestic complainants is provided more often and faster compared with predation cases under competition law. This is largely because the economics applied to anti-dumping and other trade remedy cases are limited and generally ignore adverse price, quantity and other effects on business customers and final consumers. However, except for South Africa, very few SADC Member States are currently administering their trade remedy laws. Therefore, domestic producers may be seeking similar relief from dumping through the predation provisions of competition laws. Separating the credible from the questionable complaints will be especially important in addressing allegations of cross-border predation. At the same time, as the SADC regional market becomes more integrated and a customs union is established, consideration could be given to replace anti-dumping and other trade remedy laws with competition rules on price and non-price predation (and perhaps state subsidies). Some successful predation cases under competition law may make it easier in the future to replace trade remedy laws with competition rules in the SADC region. The following from Uslay et al (2006:72) summarizes the decision-making best-practice framework for predatory pricing that is used by the U.S. federal courts. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

7 The remainder of this project document summarizes some of the additional issues and best practices that could be employed by SADC Member State CAs to address these predation and related challenges. 3. Seven Questions to be Asked at the Outset and Throughout the Predation Investigation When a complaint or other information is received on an allegation of predatory pricing or other forms of predation, there are seven questions that need to be asked at the outset, answered in a reasonably credible and positive manner to turn the complaint or other information into an official case, and need to be explored and answered in greater detail throughout the investigation (see e.g. OECD 2007). 1. Does the available evidence from the complainant, business customers and other sources indicate a high probability that the alleged predator already has market power? Without market power during the predation period, the probabilities of recoupment and harm to competition and consumers after the predation comes to an end are much lower. 2. Does the economic sense test indicate other reasons why the alleged predator would be charging prices that are well below normal (Werden 2006 and Muris 2005: )? The alleged predator may only be charging lower prices in order to meet the competition, build market share, its customer base and brand name, and thereby achieve economies of scale and scope that over time may benefit competition and consumers. 3 3 The economic sense test for predatory pricing is used by competition authorities to argue that the conduct is predatory because it would be unprofitable but for its exclusionary effect. Defendants can then rebut TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

8 3. Are the prices being charged by the alleged predator well below historical prices and what most market observers would consider normal prices? Prices that are only marginally below historical norms (say less than 5%) provide a weak enforcement case unless there is strong evidence that cost schedules in the relevant market and industry are moving downwards. The right questions to a few business customers should provide good information on this question. 4. Has the alleged predator been charging prices that are considered to be predatory by the complainant for an extended period measured in months? A below cost price for a few days or weeks can be readily explained by a short-term slump in consumer demand, a desire to reduce unwanted inventory, a short term price war that provides immediate benefits to consumers and little risk of harm over the long term, or other motivations that make economic and business sense in terms of business strategy and economic efficiency. Strategy, marketing and related documents secured from the alleged predator as well as the opinions of business customers and other key informants -- can be informative in assessing the motivation and rationale of the company. 5. Are the alleged predator, complainant, and other rivals operating in a relevant market and industry that can be considered to be economically and socially important for purposes of case selection (see the case section project document)? 6. Is their evidence that the complainant and other rivals placed at risk are equally or more efficient than the alleged predator? Strategies of aggressive competitors that force less efficient rivals to reduce production or exit the market are important to the competitive process, generally benefit competition and consumers, and therefore should be encouraged and not prohibited under competition law (Vickers 2005:F ). There are a number of reasons why the alleged predator may be more efficient than its rivals, such as the economies of scale and scope that result from vertical integration and the production of multiple products. 7. Does the complainant have a history of making questionable complaints about competitors to competition, consumer, sector regulation and other authorities in the MS and throughout the SADC region? The answers to all seven questions would need to be positive to conduct a predation case or at a minimum there would need to be reasonable evidence on each question that would indicate a fairly high probability of a successful investigation and prosecution. this argument by offering alternative objectives and strategies that make economic and business sense in order to rebut this presumption. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

9 4. Other Major SADC Issues in Conducting a Price or Non-Price Predation Case In the past, the first and generally most important step in a price predation case was to collect financial, price and cost data from the alleged predator covering the periods before and during the alleged price predation. This information would be needed in order to determine whether the predatory price is below average total cost, average operating, variable or avoidable cost, or below marginal cost which under the original Areeda- Turner rule was considered to be the most important indicator for enforcement case success under the conventional predatory pricing theory (see e.g. Uslay et al 2007:69-71). In its most developed form, the Areeda-Turner rule essentially states that the alleged predator should be found guilty of predatory pricing when its alleged predatory price is below its marginal cost, that is, the additional cost of producing one more unit of the product. Any price above marginal cost would be judged as non-predatory and therefore the business would be innocent of predatory pricing. There are however some questionable features to the standard presumption that can be ignored in theory but must be addressed in a SADC region predation case. First, the financial, price and cost data provided by the alleged predator almost always will not be consistent with the price and cost variables used in economic theory. In particular, estimates of marginal cost are generally not available from financial statements. Second, the alleged predator is in a good position to provide financial data that are biased to support its arguments, and undermine the arguments of the complainant. This situation further complicates the estimation of average variable/avoidable costs in order to make price-cost comparisons.. Third, many competition authorities in the SADC region lack the resources, skills and experience to extract marginal, variable, avoidable or other cost information from what may be overly comprehensive and confusing and perhaps biased financial data, and make reasonably credible variable, avoidable or marginal cost estimates that would satisfy the Areeda-Turner rule. Defining and estimating marginal cost in the real world is very easy in theory and devilishly difficult and highly contentious in practice. Therefore, the predatory pricing literature and cases have been using other price and cost measures such as average variable cost, average avoidable cost, and average total cost. While average variable/avoidable cost is now the preferred cost measure (see Gangi and Bienen and Csorgo 2009), this and other cost measures continue to generate controversy, partly because only prices below marginal cost provide a strong theoretical argument for a predatory pricing case (Vickers 2005:F ). A final challenge is that, because of high fixed and sunk costs, marginal and average variable/operating costs are very low in passenger airlines and many other network and more capital intensive, R&D and innovation intensive industries. These industries generate many predatory pricing complaints but also generate many of the most challenging, controversial and questionable predatory pricing cases (see e.g. Farrell and Katz 2001, Sagers 2009 and Mazzone and Mingardi 2011). TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

10 5. Going Beyond the Areeda-Turner Rule Because of these and other difficulties with interpreting financial data from alleged predators in a manner that satisfies the original or modified Areeda-Turner rule, the predatory pricing literature and recent cases are now placing greater emphasis on the risks of recoupment, increases in sustainable market dominance and power, and substantial harm to competition and consumers for an extended period after the period of below cost or below normal prices come to an end (see e.g. Csorgo 2009:5-7 and 19-28). Under this approach, once it is established that prices for an extended period have likely been substantially below normal and/or average variable/avoidable cost for a long period of time, the analysis would then shift to market dominance and power and become similar to an abuse of dominance case (summarized in the AOD best practices project document). However, a predation case has the added complexity that for the most part the analysis focuses on the future risk of anti-competitive conduct, events and outcomes after the predatory pricing period is over. In this manner, a predation case is more like a merger review case. There are some other features and best practices that are important and even unique to predation cases, which may be important to SADC MS competition authorities. Less than definitive data on marginal costs, price-cost margins and other indicators to satisfy the Areeda-Turner rule should not be used as a reason or excuse for not opening a predation investigation as long as there is reasonable evidence of below normal and/or below cost prices for an extended period and there is credible and affirmative evidence on the seven questions listed in the previous section (Csorgo 2009). A predation case is much stronger if the evidence on below normal and below cost prices (however defined based on available data) are complemented and supported by investments in non-price predation (Ordover and Willig 1981). Evidence of non-price predation strategies strengthen the recoupment and market power parts of the predation story, because (i) the predator has strong incentives to recover its losses and to receive a good return on its non-price predation investments; and (ii) good returns on investments in non-price predation strategies do not require that the victim competitors exit the market, only that they become less aggressive and more passive and cooperative. Companies that are alleging predatory conduct by one of their competitors should address in their complaint not only price and cost information, but as well evidence of other questionable business practices by the alleged predator. Threats of and actual predatory behaviour are more credible, effective and profitable to predators, and more harmful to competition and consumers, when conducted by larger business groups and conglomerates and other larger foreign and domestic companies that produce many products and compete in multiple markets against the same competitors. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

11 There are three reasons why larger multi-product companies and business groups can be more effective, profitable and harmful predators compared with single product firms. First, the profits from other products can be used to support and cross-subsidize the predating products, divisions and affiliate companies during the predation period. Second, larger companies and business groups have better access to funding from external and internal capital markets to finance their investments in price and non-price predation. Third, recoupment and super-competitive profits to the predator can be generated not only in the relevant market but also in other complementary and related markets. Through these demonstration effects, the same competitors and other companies could become more passive and cooperative because of fear of future price wars, predation and other forms of retaliation by the same large company or business group in other markets. Identifying the targeted victim or victims of the predator is very important to a predation case (Uslay et al 2006:98-99 and Campbell and Sandman 2004). The gains from predation can be particularly large when there is a high risk that predation would make fringe companies less competitive, or would remove an efficient maverick producer from the relevant and other markets. Allegations, complaints and threats of price and non-price predation can increase in number and credibility after a merger or other market development results in a larger and more dynamic and efficient competitor, which could then use price and other forms of predation to eliminate its remaining rivals. History of predatory and related conduct by the merging parties prior to the transaction should be given some weight by the SADC CA in determining whether the merger should be allowed to proceed. Otherwise, the CA could be left with a much more complex and costly predation or AOD case after the transaction is completed (see e.g. Cook 2002). Past history and conduct plus institutional context are important to predation cases in SADC Member States. The enforcement case is strengthened when there is evidence that smaller competitors have been weakened through: (i) past price wars instigated by the alleged predator; combined with (ii) the small competitors limited access to external financing. The current period of predation may simply be the final blow that leads to their inevitable exit and demise. 6. Concluding Comment on Cross-Border Predation As cross-border transactions increase in the SADC region, allegations of and complaints on cross-border predation will also increase. Cross-border predation allegations and cases have many features that are similar to allegations and cases when the alleged predator and victim are in the same Member State. At the same time, these cross-border cases will represent a major challenge and test for the cooperation and soft harmonization efforts of the SADC Competition and Consumer TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

12 Policy Committee and community. This could be particularly true when the alleged predator is located in one of the larger and more experienced Member States and/or the alleged predator is a national champion that is being protected, supported and favoured by its home government. 4 A successful cross-border predation case will require information sharing, cooperative and coordinated enforcement, joint analysis, and positive comity when investigating the predation case and in particular when determining and applying sanctions, penalties and remedies to the predatory company located in a second MS. Successful cross-border predation cases will demonstrate that: (i) (ii) (iii) cooperation and softer forms of harmonization are working to the benefit of firms, competition and final consumers in individual Member States and throughout the SADC region; by focusing on competition and consumer welfare rather than injury to a specific industry and one or a few companies, predation cases under competition laws can be used to resolve legitimate cross-border pricing and related disputes in a manner that, compared with trade remedy laws, result in much less collateral damage to the region s businesses, competition, efficiency, competitiveness, and final consumers, and to SADC market integration, poverty reduction and other broader economic goals; and therefore competition rules are able to replace anti-dumping and other trade remedy laws throughout the SADC region once the required degree of market integration is achieved (Ireland 1992). 4 This in summary form is essentially the predatory pricing story of the United States during its structural adjustment negotiations with Japan in the late 1980s and early 1990s. TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

13 Bibliography Areeda, Phillip and Donald Turner (1975), Predatory Pricing and Related Practices Under Section 2 of the Sherman Act, Harvard Law Review, 88 (4), Bhattacharjea Aditya (2003) Trade, Investment and Competition Policy: An Indian Perspective in Aaditiya Mattoo and Robert Stern Editors, India and the WTO, A Co- Publication of the World Bank and the Oxford U. Press, Washington D.C., pp Bolton Patrick, Joseph F. Brodley and Michael H. Riordan (1999) Predatory Pricing: Strategic Theory and Legal Policy Working Paper Available on the Internet Campbell Tom and Nirit Sandman (2004) A New Test for Predation: Targeting UCLA Law Review Vol p. 365 Church, Jeffrey and Roger Ware (2000) Industrial Organization: A Strategic Approach, Boston: Irwin McGraw-Hill Cook Paul (2002) Competition Policy, Market Power and Collusion in Developing Countries Centre on Regulation and Competition Working Paper Series Paper No. 33 December 2002 Csorgo Lilla (2009) Canada s Draft Abuse of Dominance Guidelines: A Comparative Look, Canadian TD MacDonald Chair Canadian Competition Bureau Dixit, Avinash (1980) The Role of Investment in Entry-Deterrence Economic Journal March 1980 Vol. 90 Issue 357 March 1980, pp Dutz Mark A., James A. Ordover, and Robert D. Willig (2000) Competition Policy and Development; Entrepreneurship, Access Policy, and Economic Development: Lessons from Industrial Organization European Economic Review Vol. 44, pp Farrell, Joseph and Michael L. Katz (2001) Competition or Predation: Schumpeterian Rivalry in Network Markets University of California at Berkeley August 2001 Fox Eleanor (2007) Economic Development, Poverty and Antitrust: The Other Path New York University of Law: Public Law and Legal Theory Research Paper Series, Working Paper No , July 2007 Gangi Massimiliano and Derk Bienen (2010) Capacity Building Training & Technical Assistance to the Regional Competition Authorities in the SADC Region: Competition Policy in the SADC Region A Reference Guide Prepared for the Trade.Com Facility (EU) and the SADC Secretariat Guiltinan, Joseph P. and Gregory T. Gundlach (1996), Aggressive and Predatory Pricing: A Framework for Analysis, Journal of Marketing, 60 (3), Ireland Derek J. (1991) Antidumping and Competition Policy Rules presentation by the Director of Economics and International Affairs, Bureau of Competition Policy TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

14 Consumer and Corporate Affairs Canada, to the Canada - United States Law Institute, Case Western Reserve University School of Law, Cleveland, Ohio, January 23, 1991 Joskow Paul L. and Alvin K. Klevorick (1979) A Framework for Analyzing Predatory Pricing Policy Yale Law School Yale Law School Legal Scholarship Repository, Faculty Scholarship Series Yale Law School Faculty Scholarship Kreps David M. and Robert Wilson (1982) Reputation and Imperfect Information Journal of Economic Theory Vol. 27 pp Mazzone Luca and Alberto Mingardi (2011) Innovation, Competition and Antitrust: An Examination of the Intel Case Economic Affairs June 2011 pp Milgrom Paul and John Roberts (1982) Predation, Reputation and Entry Deterrence Journal of Economic Theory Vol. 27 pp OECD (2007) Predatory Foreclosure: Synthesis by the Secretariat OECD Journal of Competition Law and Policy Vol 9(1):83-88 O Hagan Lucy (2000) Predatory Pricing: A New Theory Available on the Internet Ordover Janusz A. and Robert Willig (1981) An Economic Definition of Predation: Pricing and Product Innovation, Yale Law Journal, Vol. 91:8-53. Rawat Charu (2011) Report on Predatory Pricing: A Strategic Analysis Prepared under the guidance of MR. Vijay Kumar Singh Deputy Director (Law) Competition Commission of India. Submitted by Charu Rawat (Intern: January 2011) M.A (Economics) Jawaharlal Nehru University Rey, P. (1997) Competition Policy and Economic Development, Mimeo, Institut d Economie Industrielle, Universite des Sciences Sociales, Toulouse, France Sagers Chris (2009) Rarely Tried, and Rarely Successful Theoretically Impossible Price Predation Among the Airlines Working Paper Cleveland Marshall College of Law Sappington David E.M. and J. Gregory Sidak (2003a) Competition Law for State-Owned Enterprises Antitrust Law Journal Vol. 71: Sappington David E.M. and J. Gregory Sidak (2003b) Incentives for Anticompetitive Behavior by Public Enterprises Review of Industrial Organization Vol. 22, Issue 3, May 2003, pp Scheffman David T. and Richard S. Higgins (2003) 20 Years of Raising Rivals Costs: History, Assessment and Future George Mason Law Review, Vol. 12:2, pp Tirole, Jean (1988), The Theory of Industrial Organization, Cambridge: MIT Press TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December

15 Uslay, Can, Malhotra, Naresh K. and Allvine, Fred C. (2006) Predatory Pricing and Marketing Theory: Applications in Business-to-Business Context and Beyond, Journal of Business To Business Marketing, 13: 3, West Jeremy (2007) Predatory Foreclosure: Background Note OECD Journal of Competition Law and Policy Vol 9(1): TA to the SADC Secretariat - P194 - Price and Non-Price Predation - December