ARTICLES

 

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

 

 

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ABSTRACT

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

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References

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 ]

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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 ]

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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 (5^th 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.