Firms with market power engage in a variety of business practices that harm their rivals. Under what circumstances should the antitrust laws condemn these practices because they will harm consumers? This long-standing question is being discussed with renewed intensity both in the European Community and in the United States. The European Commission’s Directorate-General for Competition (DG COMP) has been working on a document explaining its views on this question for more than a year. In December 2005, it released the draft of a discussion paper (Discussion Paper) on which it has sought comments. Meanwhile, in the United States, the Antitrust Modernization Commission and, more recently, the U.S. Federal Trade Commission (FTC), have focused on this question. In both jurisdictions, the debate has been stimulated in part by controversial court decisions concerning so-called loyalty rebates. Our first issue of 2006 begins with a symposium that contributes to this discussion.
Alden Abbott and Michael Salinger, both with the FTC, begin by examining tying-a practice that is often treated as a restraint of trade under the U.S. antitrust laws and as an abuse of dominance under Article 82 of the EC Treaty. They question the approach taken both by the courts and by their fellow economists. Professor Herbert Hovenkamp, of the University of Iowa, College of Law, looks at predatory pricing. He observes that the U.S. courts tend to leave practices they do not understand to juries. He a
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