ABSTRACT
The concept of predation is that there are limitations to the manner in which competition should be conducted. American law represents a stronger tradition with fewer judicial inhibitions and, is much concerned about appropriate tests for the existence of predation. European Economic Community law is only slowly embracing predation within the terms of Article 86. If limitations are to be imposed by law, such limitations should be determined by reference to the objectives that the anti-trust laws were designed to further. Pure costs tests rely on some measure of cost to identify a price floor below which any price is deemed predatory. The net revenue test proceeds directly from the fundamental definition of predatory pricing: that any price cut whose profitability depends on the elimination of competitors is predatory. If an initial decrease in price resulting in the exclusion or exit of competitors is followed by a subsequent increase in price, predatory pricing is suspected.
