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Raimundas Moisejevas

Abstract

Article 82 of the European Community Treaty prohibits abuse of dominant position in common market if such abuse might affect trade between member states. The prohibition to abuse dominant position is also embedded in Article 9 of Lithuanian Competition law. It should be noticed that after the establishment that actions of the undertaking acting in one of the member states might affect trade between member states, in respect of this subject both national and European Union competition law provisions should be applied.
At the present moment the European Commission, which in European Union is responsible for the implementation of competition law, devotes a lot of attention to the analysis of the abuse of dominant position. In December 2005, one of the structural divisions of the European Commission, Directorate General on Competition has published “DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses”. By publishing this discussion paper DG Competition aimed to encourage all interested parties to submit their observations in relation to the plans of the Commission to establish new policy for a combating of exclusionary abuses as a form of abuse of dominant position. Plans of the Commission to establish expressis verbis above mentioned strategy in competition policy encouraged the author of this article to write it. It should be noticed that this article is not devoted for the comprehensive analysis of predatory pricing in EU law. Also, it should be emphasized that this article is not confined to the analysis of EU law; moreover it does not give supremacy for the analysis of EU law in relation to the other legal systems of the world. The aim of this article is to establish main features of the predatory pricing as a form of the abuse of dominant position. In order to achieve this aim decisions of the judicial institutions of the European Union and the United States are analyzed. While writing this article various methods have been employed – historical, comparative, systematic, analytical and other methods.
For the purposes of Article 82 predatory pricing can be defined as the practice where a dominant company lowers its price and thereby deliberately incurs losses or foregoes profits in the short run so as to enable it to eliminate or discipline one or more rivals or to prevent entry by one or more potential rivals thereby hindering the maintenance of the degree of competition still existing in the market or the growth of that competition. In order to qualify an activity as a predation three conditions have to be established: the predator has to sell its product at a price, which is below its own cost of production; the competitors have to be eliminated from the market as a result of this activity; and the predator need to have a predatory intent.
In this article it is submitted that although there are many scholars who submit that predatory pricing might be met as rarely as a unicorn, nonetheless clear examples of predatory pricing are witnessed in the case law in the courts of Europe and the United States. Recent examples of the case law of the European Court of Justice support this conclusion. Thus it is necessary to enact legal acts establishing prohibition to engage in predatory pricing.

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