Competition Based on Merit and Predatory Practices in Dominant Positions (on the Analysis of Costs of the Dominant Undertaking and Predatory Practices)

Abstract

The EUJS of 30 January 2020 ( České dráhy a.s. v. European Commission. Joined Cases C-538/18 P and C-539/18 P- ), has again dealt with the relationship between costs and prices in predatory practices when a dominant position is held. Taking into account all the cases already decided by the Court, it is concluded that there are two different methods of analysis to verify whether an undertaking has practiced predatory pricing:

- Firstly, prices below average variable costs must always be considered abusive. In such a case, it is inconceivable that there should be any economic objective other than the elimination of a competitor, since every unit produced and sold represents a loss for the undertaking.

- Secondly, prices which are lower than the average total costs but higher than the average variable costs can be considered abusive only if it can be shown that there is a plan to eliminate a competitor.

However, exceptions to this are based on the availability of data, comparison with other sectors, consideration of the objective pursued or the opportunity to recover losses. Elements summarized in this paper.