Squeezing linkLine: Rethinking Recoupment in Price Squeeze Cases

Abstract

The Supreme Court's decision in Pacific Bell Telephone Co. v. linkLine Communications, Inc. removed an important tool from competition regulators’ arsenals. Not only did the Court express skepticism about the existence of a price squeeze cause of action, but it also applied the economically mismatched predatory pricing test to price squeeze cases. Unfortunately, the lack of clarity on linkLine's reach also caused significant confusion in the lower courts. Examining these issues, this article clarifies the distinction between price squeeze and predatory pricing claims, and argues that the second step of the predatory pricing test, probability of recoupment, is inappropriate for price squeeze cases and should either be dropped from the test or replaced with a presumption of recoupment.