Objective Justifications in Predatory Pricing

Abstract

Abuse of a dominant position is one of the key aspects in EC competition law. The Court of Justice and General Court acknowledge that sometimes the actions of dominant undertaking that might be recognized as abusive should not be prohibited on the basis of Article 102 TFEU, if undertaking provides objective justification or proves that its actions generate positive effect which outweighs negative outcome on competition. Therefore, actions that usually are regarded as predatory pricing, which is one of the forms of the abuse of a dominant position, in case of special circumstances might be recognized as legitimate. In the present case, attention should be devoted to objective justifications, since this provides the basis for evaluation of legitimate, pro-competitive reasons that explain why undertakings may establish prices lower than costs. This article is devoted to the analysis of objective justification, which might prove that allegedly abusive behaviour is actually legitimate. Plenty of factors might be recognized as objective justifications, therefore it is quite difficult to provide a finite list of justifications.