Publication Date
2024
First Page
329
Document Type
Article
Abstract
Philosophers and policymakers have long cautioned against comparing incomparable objects or concepts. Scores of judicial opinions caution judges and litigants against comparing apples to oranges. The original idiom, as recited by such sixteenth-century luminaries as Sir Thomas More and William Shakespeare, admonished against equating apples and oysters,4 two items unlikely to be mistaken for each other given their obvious dissimilarities in color, texture, smell, and immediate edibility. Over time, oysters were replaced by oranges and the expression evolved to caution against confusing two types of fruit, which do in fact share some similar qualities but are quite distinct and, thus, incomparable.
The danger of false analogies goes beyond the risk of an apple lover biting into an oyster’s shell or even an orange’s peel. In common law fields, such as antitrust law, when judicial opinions create a false equivalence between disparate forms of conduct, courts risk condemning benign conduct or exonerating dangerous misconduct—denominated as false positives and false negatives, respectively. Despite the frequency and cost of false negatives, many antitrust scholars and federal judges have overemphasized the risk of false positives in antitrust jurisprudence. In so doing, they have relied on false analogies to exonerate all manner of anticompetitive behavior. This Article explores how antitrust jurisprudence has equated apples and oysters in a way that inappropriately immunizes harmful conduct from antitrust liability. The apple is predatory pricing, the use of below-cost pricing to destroy business rivals. The oysters are antitrust claims that do not involve below-cost pricing.
Predatory pricing involves two distinct phases: predation and recoupment. During the predation phase, the predator charges a price below its own costs, based on the belief that its competitors will not be able to match this low price. Rivals will exit the market to avoid losing money. After the rivals have exited the market, the recoupment phase begins. Here, the predator charges a monopoly price because there are no other sellers to discipline its price. The monopolist’s goal is to charge a price high enough and for long enough to be able to recoup its losses from the predation phase and to reap monopoly profits for the foreseeable future.
Repository Citation
Christopher
R.
Leslie
False Analogies to Predatory Pricing,
172
U. Pa. L. Rev.
329
(2024).
Available at:
https://scholarship.law.upenn.edu/penn_law_review/vol172/iss2/2