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Whole Foods, Fresh Concerns?

How the Recoupment Requirement Misses the Mark on Amazon’s Anticompetitive Practices
  • Ndjuoh MehChu
Chapter
Part of the Economic Analysis of Law in European Legal Scholarship book series (EALELS, volume 7)

Abstract

The tools used to identify whether firms have reached a competitive tipping point in the United States come from regulatory frameworks established in the 1970s. Antitrust laws that were enacted to regulate an industrial economy continue to emphasize narrow inquiries that fail to appreciate the sophistication of the high-technology markets of the twenty-first century. Predatory pricing claims arising under Section 2 of the Sherman Antitrust Act bring this point into sharp focus. U.S. courts recognize predatory pricing as generally implausible, a view that is preserved in the recoupment requirement. Nevertheless, developments in economic theory over the last 20 years contravene this view. Amazon’s spectacular growth has brought the tension between current antitrust jurisprudence and modern economic insights to the fore, and offers an opportunity to re-examine the viability of the recoupment requirement. This paper attempts such an examination, using Amazon’s acquisition of Whole Foods to anchor the discussion. It proposes that the recoupment requirement should be augmented to permit predatory pricing to be demonstrated by proof that a predatory scheme recognized in modern economic teachings—in this instance, reputation effects—is afoot.

Notes

Acknowledgement

This project could not have been completed without the assistance of many readers who provided generous input on several drafts. Particularly, I am grateful to Professor Klaus Mathis and the participants at the University of Lucerne School of Law’s 7th annual Law and Economics conference for their insights. I am also grateful to the editors and publisher for their feedback. Lastly, I thank Sarah Schultes for her valuable guidance and support throughout the process. 

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Ndjuoh MehChu
    • 1
  1. 1.Howard University School of LawWashingtonUSA

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