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University of Michigan Law School

Business Organizations Law

Law & Economics Working Papers

2010

Antitrust

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Predation Analysis And The Ftc’S Case Against Intel, Daniel A. Crane May 2010

Predation Analysis And The Ftc’S Case Against Intel, Daniel A. Crane

Law & Economics Working Papers

The Federal Trade Commission's pending antitrust case against Intel challenges a number of Intel's discounting and rebating practices. The Commission appears poised to apply a cost-price test to the challenged practices, but proposes to include "fixed sunk costs" in the appropriate measure of cost. This paper explains the importance of using cost-price screens to assess unilaterally imposed prices and analyzes the futility of including sunk costs in the relevant cost measure.