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

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