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Department of Justice and Federal Trade Commission
Single Firm Conduct: Predatory Buying Panel

Tim Brennan

2006: T.D. MacDonald Chair in Industrial Economics
Competition Bureau, Industry Canada

Permanent: Professor, Public Policy and Economics
University of Maryland, Baltimore County

Senior Fellow, Resources for the Future, Washington, DC

brennan.tim@cb-bc.gc.ca, brennan@umbc.edu

FTC Headquarters
Washington, DC

June 22, 2006

Recommendations

  • Predation or Exclusion? Pick one or the other.

  • Validate necessary assumptions in those rare predatory buying cases.

  • For exclusion, first delineate complement market, using HMGs.

  • Then, establish price effect from complementary marketmonopolization (CMM).

  • Test discounts by effect on complement price, not comparison to cost.

  • Predation screens—profit sacrifice, equally efficient competitor,even prior dominance—do not belong in exclusion cases.

  • Consider share-based rather than all-or-nothing remedies.

  • Focus on creation of new monopolies, not maintenance of old ones.

Brennan: DOJ/FTC Predatory Buying Panel June 22, 2006 2