Review of Industrial Organization 20: 375–383, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
Predatory Pricing and the Speed of Antitrust
Department of Economics, University of Alberta, Edmonton, Alberta, T6G 2H4, Canada
Abstract. A common complaint is that in certain industries antitrust action against predation is too
slow to ensure that a true victim can survive until the antitrust process has been concluded. This paper
discusses, in the context of two recent antitrust cases, the sources of delay in the antitrust process,
and different policy reforms aimed at speeding up the process or otherwise protecting a true victim.
Key words: Competition policy, predatory pricing.
Policy makers and antitrust enforcement agencies often assert that in certain indus-
tries, antitrust action against predation must be swift to ensure that the prey is not
eliminated before the antitrust action is concluded. As U.S. Congressman Charles
E. Schumer argued in his comments before the house judiciary committee regard-
ing policies proposed by the Department of Transportation (DOT), “Currently, the
Department takes far too long to respond to a complaint of predatory practices. It
is little solace for executives at a small airline for DOT to declare their complaint
valid if they have already been driven out of business by unfair competition”.
Similar concerns have been expressed in Canada regarding the airline industry.
The Commissioner of Competition, who conducts investigations under the Cana-
dian Competition Act, has stated that “it takes considerable time for the Bureau
to investigate the merits of complaints and prepare a case for litigation before the
Tribunal. Given the extraordinary circumstances in the airline industry, the current
provisions of the Act are inadequate to secure timely and effective relief”.
In response to these concerns, several policies have been proposed to reduce the
time required for the antitrust process in predation cases, or otherwise protect a true
victim. The purpose of this paper is to consider the causes for antitrust enforcement
I thank Douglas West and Heather Eckert for detailed comments. Remaining errors are my own.
Testimony of congressman Charles E. Schumer before the House Judiciary Committee, May
19, 1998 (available online at
Letter from Konrad von Finckenstein to The Honourable David M. Collenette, Minister of
Transport, October 22, 1999 (Available on the Competition Bureau’s website at competition.ic.gc.ca)