Against the background of the Post Danmark II judgement, this article by Lars Wiethaus clarifies that the so called as-efficient competitor test is a specific type of price-cost test based on the dominant firm’s costs. If no as-efficient competitor can emerge for reasons pointed out by the court, the price-cost test can be based on a reasonably-efficient competitor’s (higher) costs. Hence, the article proposes that price-cost analysis remains generally relevant, the applicable cost standard being a question of the specific circumstances of a case. Second, the article proposes a relatively easy implementation of price-cost analysis. Third, being generally one tool amongst others, price-cost analysis also provides a synthesis of all ‘all the circumstances’ deemed relevant by the court. To read the article, contact the author.
Assessing umbrella pricing incentives
When collusive agreements involve a subset of firms in an industry, they may create the incentive and ability for firms that are not participants in the cartel...