High Domestic Prices that Subsidize Low Export Prices Under Romania's Competition Law

12 Pages Posted: 28 Sep 2004

See all articles by Russell W. Pittman

Russell W. Pittman

U.S. Department of Justice - Economic Analysis Group; Kyiv School of Economics; New Economic School (NES)

Abstract

Romania's competition law, in many ways similar to Articles 81 and 82 of the Treaty of Amsterdam, includes a unique provision that finds an abuse of a dominant position when a company exports at a price "below production cost" and sets a high domestic price "covering the difference." This paper examines what behavior this provision might target that is not already covered by the more standard provisions against both predatory pricing and excessively high pricing. It appears that the objective is to insert a United Brands type standard for measuring a fair price into the law, and the paper argues that the most likely outcome of the current trend of expanded enforcement of this provision will be to discourage exports.

Keywords: competition, antitrust, abuse of dominance, price control, Romania, Central and Eastern Europe

JEL Classification: K21, L41, P22, P37

Suggested Citation

Pittman, Russell, High Domestic Prices that Subsidize Low Export Prices Under Romania's Competition Law. Available at SSRN: https://ssrn.com/abstract=596483 or http://dx.doi.org/10.2139/ssrn.596483

Russell Pittman (Contact Author)

U.S. Department of Justice - Economic Analysis Group ( email )

450 5th St. NW
Antitrust Division
Washington, DC 20530
United States
202-307-6367 (Phone)
202-307-3372 (Fax)

Kyiv School of Economics ( email )

vul. Yakira, 13, 3d floor, suite 334
Kyiv, 04119
Ukraine

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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