Press-release of 09.07.2010

"The effect of commercial activities upon the state of competition may be ambiguous", is convinced a Judge of the United States Court of Appeals for the District of Columbia Circuit Douglas Ginsburg.

Speaking on 9th July 2010 at the Russian - American seminar on antimonopoly enforcement, the federal judge gave a detailed analysis how the "rule of reason" is applied to determine abuse of market dominance by companies.

"Under the "rule of reason", the relevant facts are such facts that help understanding whether restriction of competition increases or decreases production output, or increases or decreased prices", explained Judge Ginsburg.

A well-known American judge analyzed several examples from the practice of American antimonopoly authorities, for instance, the case United States v. "American Airlines". The air carrier diverted its aircrafts from more to less profitable routes and cut down the air fare for less profitable routes to push small and low-cost operators out of the market. The antimonopoly authorities were concerned that after driving out its competitors, "American Airlines" cut the flights on those routes and increased air fare.

"American Airlines" won the case. The government claim was not allowed because "American Airlines" did not set prices below a reasonable cost level; at the worst its prices march competitors' prices. Even if the air carrier set the prices below its production costs, there is a considerable degree of probability that the company will recover its losses and then starts receiving profit by increasing the prices above competitive level.