What is the areeda-Turner rule?

What is the areeda-Turner rule?

Abstract The Areeda-Turner rule in U.S. antitrust jurisprudence limits successful predatory pricing cases to circumstances where prices can be shown to have been set below marginal costs.

What is the areeda-Turner test?

The Areeda-Turner rule suggests prices at or above reasonable expected average variable costs (AVC) are presumed to be lawful, but prices below AVC are presumed to be unlawful and anti-competitive.

How do you prove predatory pricing?

To prevail on a predatory-pricing claim, plaintiff must prove that (1) the prices were below an appropriate measure of defendant’s costs in the short term, and (2) defendant had a dangerous probability of recouping its investment in below-cost prices.

What is predatory pricing under competition law?

Trademarks Law Predatory pricing is a strategy that entails a temporary price below the cost of production in order to injure competition and thereby reap higher profits in the long run[i]. Predatory pricing is a strategy adopted to enhance market power.

What is the purpose of the Areeda Turner test?

Areeda turner test refers to an economic test used in the U.S. it is a cost-based test that determines for predatory pricing whereby a price below average variable cost is presumed to be illegal or predatory. Areeda turner test is widely accepted by federal courts.

What did Areeda and Turner say about predatory pricing?

Few works of legal scholarship have had the impact enjoyed by Areeda and Turner’s 1975 article on predatory pricing. Proof of predatory pricing under the Areeda-Turner test requires two things.

When did the Ninth Circuit reject Areeda and Turner?

For instance, in 1983, the Ninth Circuit rejected the notion, espoused by Areeda and Turner, that “prices above average total cost ‘should be conclusively presumed legal.'”