Re-Pricing Through Disruption in Oligopolies with Tacit Collusion: A Framework for Abuse of Collective Dominance Law
Posted by Social Science Research Network
Re-Pricing Through Disruption in Oligopolies with Tacit Collusion: A Framework for Abuse of Collective Dominance Law Nicolas Petit (University of Liege)
Abstract: This paper proposes an understanding of abuse of collective dominance or shared monopolization that does not outlaw oligopolistic tacit collusion as such, but that reputes abusive a set of tactics adopted by tacitly colluding oligopolists exposed to disruption. As much as deviation is an internal force likely to undermine tacit collusion, disruption is a powerful external force that can cause a return to the competitive equilibrium. The sources of disruption may be technological (eg radical innovation), economic (eg entry of a low-cost player) or legal (eg tax reform). But disruption may never deliver its pro-competitive promises if oligopolists tinker to restore a collusive equilibrium. This paper suggests that competition agencies (“agencies”) could use the dormant doctrine of abuse of collective dominance to illegalize oligopolists’ conduct that seeks to “re-price” through disruption, and elude its pro-competitive effect. This rationalized definition of abuse of collective dominance would both promote legal certainty by clarifying the messy state of the law in this field, and ensure economic efficiency by giving agencies a market-triggered ex post remedy in mature oligopolies with lethargic M&A activity.
This paper is divided in IV sections. First, it explains the case for more ex post enforcement in oligopolistic markets with tacit collusion (I). Second, it describes how disruption can undermine tacit collusion, and what oligopolists can do to overcome the competitive effect of disruption (II). Third, it discusses the pros and cons of this approach, in particular in comparison with alternative scholarly proposals to apply cartel law to tacit collusion (III). Fourth, it skims through EU cases decided at Member State level, to gain a better understanding of the existing antitrust policies on collective dominance (IV).
Featured News
Redfin Settles $9.2M Commission Inflation Lawsuits
May 7, 2024 by
CPI
DOJ Supports Colorado’s Efforts to Block Kroger-Albertsons Merger
May 7, 2024 by
CPI
Japan Considers Regulation of AI Developers
May 7, 2024 by
CPI
European Commission Extends Decision Deadline for Ita-Lufthansa Merger
May 7, 2024 by
CPI
UK, US and Australia Sanction Senior Leader of LockBit Cybercrime Gang
May 7, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI