Predatory pricing by a dominant firm is prohibited under most competition law jurisdictions including the EU and the US. In addition to that, there are several explanations on why a firm may choose to sacrifice current profits for a future gain which help in understanding the test for predatory pricing assessment in the US and the EU which are different. When the tactic is used by a firm that has more than one side such as an online shopping website or newspaper, it may be used to price discriminate between the different sides in such a manner that one side’s lower prices get cross-subsidized by the other side paying more. The paper explores past cases where cross-subsidization had a predatory element involved in them and in some cases resulted in finding of an abuse of dominant position.

This talk evaluates the different theories on predatory pricing and carries out case law analysis to determine that two-sided online platforms may require a modified test to assess predatory pricing as the current one may seem underinclusive. This relates to the nature of platform markets where there are strong network effects and low marginal cost (MC) for acquiring new consumers. Therefore, the paper proposes a new test for assessment of predatory pricing in the EU under Article 102 TFEU.

Anush Ganesh is a lecturer in law at St Mary’s University Law School. He is the current programme director for the LLM in International Business Law. His primary research interest is in competition law on which he completed his PhD at UEA.