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South African Journal of Economic and Management Sciences

On-line version ISSN 2222-3436
Print version ISSN 1015-8812

S. Afr. j. econ. manag. sci. vol.11 n.3 Pretoria Oct. 2008




Measuring excessive pricing as an abuse of dominance - an assessment of the criteria used in the Harmony Gold/Mittal Steel complaint



Reena das Nair1

Competition Commission of South Africa




The Competition Tribunal recently found Mittal Steel SA guilty of abusing its super-dominant position by charging excessive prices to the detriment of consumers of flat carbon steel products. This article assesses the economic tests to be used for excessive pricing in light of the case and reviews the lessons that can be learned from the evidence required for the different tests. It discusses issues related to using profitability as a test and points out problems and pitfalls in profitability measures.

JEL: L41



“Full text available only in PDF format”




1 COMPETITION TRIBUNAL OF SOUTH AFRICA (2007) Reasons in the matter between Harmony Gold Mining co ltd, Durban Roodepoort Deep Limited and Iscor Ltd, Mac Steel International BV; Case No. 13/CR/Feb04, 27th March 2007.         [ Links ]

2 EVANS, D. & PADILLA, J. (2005) "Excessive prices: Using economics to define administrable legal rules", Journal of Competition Law and Economics, 1(1): 97-122.         [ Links ]

3 FINGLETON, J. (2006) "De-monopolizing Ireland", European Competition Law Annual: 2003, in C. Ehlermann & I. Antanasiu (eds.) What is an Abuse of a Dominant position? Hart Publishing: Portland, Oregon, USA: 53-68.         [ Links ]

4 GAL, M. (2004) Monopoly Pricing as an Antitrust Offence in the U.S. and the EC: Two Systems of Belief about Monopoly? Federal Legal Publications, Inc.: 390A Heritage Hills, NY 10589.         [ Links ]

5 LEACH, D.F. (1992) "Concentration and profits in South Africa: Monopoly or efficiency?" The South African Journal of Economics, 60(2): 143-157.         [ Links ]

6 LIND, R. & WALKER, M. (2003) "The mis(use) of profitability analysis in competition law cases", Charles River Associates Competition Policy, discussion paper 9.         [ Links ]

7 MARTIN, S. (1993) Industrial Economics-Economic Analysis and Public Policy (2nd ed.) Prentice Hall: Upper Saddle River, N.J.         [ Links ]

8 MONTI, M. (2006) "Panel discussion (panel one)-Policy objectives, enforcement tools and actors, types of abuses, the case of excessive pricing", in European Competition Law Annual: 2003, What is an Abuse of a Dominant Position? C. Ehlermann & I. Antanasiu (eds.) Hart Publishing: Portland, Oregon, USA: 3-50.         [ Links ]

9 MOTTA, M. & DE STREEL, A. (2006) "Excessive pricing and price squeeze under EU law", in European Competition Law Annual: 2003, What is an Abuse of a Dominant Position? C. Ehlermann & I.Antanasiu (eds.) Hart Publishing: Portland, Oregon, USA: 91-125.         [ Links ]

10 OFFICE OF FAIR TRADING (1999) "Assessment of individual agreements and conduct", Report no: 414.         [ Links ]

11 OFFICE OF FAIR TRADING (2003) "Assessing profitability in competition policy analysis", Economic Discussion Paper 6, report prepared for the Office of Fair Trading by OXERA, Report no: 657.         [ Links ]

12 REEKIE, W.D. (1999) "The Competition Act 1998: An economic perspective", The South African Journal of Economics, 67(2): 257-288.         [ Links ]

13 SCHUMPETER, J.A. (1934) The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Harvard University Press: Cambridge, MA.         [ Links ]

14 THERON, N. (2001) "The economics of competition policy: Merger analysis in South Africa", South African Journal of Economics, 69(4): 614-658.         [ Links ]

15 WHISH, R. (2003) Competition Law (5th ed.) Lexis Nexis: London.         [ Links ]



1 This article draws from the research undertaken for the complaint against Mittal Steel SA by author, Simon Roberts and Ryan Hawthorne. It does not necessarily reflect the views of my fellow researchers or the Competition Commission.

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