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Disoriented No More: An Economics Compass for the EU’s Cost Orientation Principle

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New Business and Regulatory Strategies in the Postal Sector

Part of the book series: Topics in Regulatory Economics and Policy ((TREP))

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Abstract

Postal incumbents across the world are often subject to price-cost rules. The motivation for our paper is the discussion within the EU and elsewhere of this relationship, against a backdrop of a somewhat ambiguous framework and uncertain and diverging implementation of regulatory price-cost tests.

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Notes

  1. 1.

    US Court of Appeals for the District of Columbia Circuit (2018).

  2. 2.

    See Advocate General opinion issued on 20 June 2018 in the case Sandd BV v Autoriteit Consument en Markt (Case C-256/17) with a particular focus on the interpretation of Article 12 of the Postal Directive.

  3. 3.

    See Advocate General opinion issued on 20 June 2018 in the case Sandd BV v Autoriteit Consument en Markt (Case C-256/17).

  4. 4.

    Cost variation of changing output by one unit.

  5. 5.

    Tirole (1988), Varian (1990).

  6. 6.

    The specific degree to which this takes place may differ from case to case.

  7. 7.

    ERGP (2012).

  8. 8.

    In the original Ramsey approach, the regulated firm earns no profit.

  9. 9.

    See e.g. in EU law the criteria set out in the CJEU AKZO Chemie BV vs European Commission case C-62/86.

  10. 10.

    CJEU Case Post Danmark A/S v. Konkurrencerådet, European Court of Justice Case C-23/14.

  11. 11.

    European Commission (2001), p. 6.

  12. 12.

    European Commission (2001), pp. 16.

  13. 13.

    European Commission (2001), footnote 7.

  14. 14.

    The ECJ Advocate General opinion (§81) in the Sandd case stresses this point and refers to the Directive 2008/6 recitals 12, 26 and 41.

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Author information

Authors and Affiliations

  1. Copenhagen Economics, Copenhagen, Denmark

    Henrik Ballebye Okholm, Mindaugas Cerpickis & Bruno Basalisco

Authors
  1. Henrik Ballebye Okholm
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  2. Mindaugas Cerpickis
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  3. Bruno Basalisco
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Corresponding author

Correspondence to Bruno Basalisco .

Editor information

Editors and Affiliations

  1. Florence School of Regulation – Communications and Media, European University Institute, Fiesole, Italy

    Pier Luigi Parcu

  2. School of Public Policy, UMBC, Baltimore, MD, USA

    Timothy J. Brennan

  3. Rutgers Business School, Newark, NJ, USA

    Victor Glass

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Okholm, H.B., Cerpickis, M., Basalisco, B. (2018). Disoriented No More: An Economics Compass for the EU’s Cost Orientation Principle. In: Parcu, P., Brennan, T., Glass, V. (eds) New Business and Regulatory Strategies in the Postal Sector. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-030-02937-1_15

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