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Squeezing linkLine : Rethinking Recoupment in Price Squeeze Cases
Author(s) -
Kennedy Patrick
Publication year - 2020
Publication title -
american business law journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.248
H-Index - 23
eISSN - 1744-1714
pISSN - 0002-7766
DOI - 10.1111/ablj.12165
Subject(s) - predatory pricing , presumption , supreme court , economics , confusion , competition (biology) , test (biology) , vertical restraints , microeconomics , law and economics , law , political science , psychoanalysis , biology , incentive , psychology , ecology , paleontology , monopoly
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.