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This paper aims to study the historical origins of margin squeeze cases in the USA and Europe.

The author compares and contrasts major margin squeeze investigations in the USA and the European Union (EU) in terms of the role of efficiency and fairness and shows their roots in the socialist calculation debate of the 1940s.

It was found that the USA and EU diverge in their approaches towards margin squeeze claims. While the USA case law focuses more on efficiency, the European Commission makes decisions based more on fairness and “protection of rivals”. This shows that political and ideological preferences influence legal decision-making.

The paper is limited to major cases in telecommunications. It leaves aside cases in other areas. Thus, the author cautions that the generalization of the findings of the paper to all margin squeeze cases, or competition policy in general, may be difficult.

While there is extensive literature on margin squeeze cases in the USA and EU, there is little work on the historical and ideological connections. The paper contributes to the literature by drawing attention to political influences over technical decisions.

This chapter integrates two separate branches of the law and economics literature to demonstrate the two-sided risk of market exclusion by a vertically integrated firm (VIF) with upstream and downstream market power. The ratio of downstream (retail) to upstream (wholesale) price-cost margins is key. A margin ratio that is “too low” can result in a vertical price squeeze, whereas one that is “too high” can create incentives for the VIF to engage in non-price discrimination or sabotage. A price squeeze occurs when a rival is inefficiently foreclosed because the upstream (input) price is too high relative to the downstream (output) price. Sabotage arises when the VIF raises its rivals' costs which, in turn, raises their prices and diverts demand from the rivals to the VIF. Displacement ratios delineate the range of safe harbor margin ratios within which neither form of market exclusion arises. The admissible range of these margin ratios is decreasing in the degree of product substitutability and reduces to a single ratio in the limit as the competing products approach perfect substitutes. The policy challenge is to apply these pricing constraints judiciously to prevent market exclusion in accordance with a consumer-welfare standard, while recognizing the risk that these protections can be appropriated and used strategically in the errant pursuit of a competitor-welfare standard. These issues may take on greater prominence in light of the recent release of the DOJ/FTC draft vertical merger guidelines.

Operators are launching bundles of services to retain customers and improve ARPU but regulators and competition authorities need to ensure fair competition. The objectives of this article are to present the reasonability of ex‐ante and ex‐post intervention and the methodologies and imputation test that might be considered by national regulatory agencies (NRAs) and national competition authorities (NCAs) to guarantee effective competition.

The methodology from a regulatory standpoint consists of analyzing the impact that margin squeeze might have on the level of competition. It is based on estimating how costs and retail prices will evolve over time. The methodology aims to predict how margins will evolve taking into consideration the number of subscribers and network costs.

The increasing number of convergent offers, the roll out of new technologies that allows the commercialization of new services and applications and the transformation in the access network means that the methodology used by the NRAs/NCAs to analyze the offers of vertically integrated operators should be revised.

The paper highlights the need for a new methodology to assess anti‐competitive behavior arising from bundling and identifies factors that should be taken into account.

The competition and regulatory economics literature has developed indicators that detect whether a vertically integrated provider (VIP) is engaging in market exclusion in the form of an anticompetitive price squeeze and non-price discrimination leading to sabotage of downstream competitors. Weisman integrates these indicators by developing a safe-harbor range within which a profit-maximizing VIP engages in neither form of market exclusion. Downstream retail competition that depends on the VIP’s inputs imposes upward pricing pressure on the downstream prices, with the amount of such pressure increasing as the downstream products become more homogeneous (closer substitutes). We analyze the implications of upward pricing pressure for antitrust evaluations of a duty to deal, regulatory policies mandating wholesale inputs for entrants, and vertical mergers. We find, for example, no basis to oppose a merger in which the VIP was previously required to supply inputs to rivals at unregulated prices.

The advanced technology enables retailers to develop customer profile analysis (CPA) to implement personalized pricing. However, considering the efficiency of developing CPA, the benefit to different retailers of implementing more precise personalized pricing remains unclear. Thus, this essay aimed to investigate the impact of efficiency on participants’ strategies and profits in the supply chain.

A two-stage game model was introduced in the presence of a manufacturer who sets his wholesale price and a retailer that decides her CPA strategy. The equilibrium results were generated by backward induction.

Most retailers are willing to develop the highest CPA to implement perfect personalized pricing, but those inefficient retailers with high production costs would like to determine a middle CPA to implement bounded personalized pricing. The retailers’ profits may decrease with the efficiency of developing CPA when the efficiency is middle. In this case, as the efficiency improves, the manufacturer increases the wholesale price, resulting in lower demand and thus lower profits. Moreover, define a Pareto Improvement (PI) strategy as one that benefits both manufacturers and retailers. Therefore, uniform pricing is a PI when the unit cost is high and the efficiency is low; personalized pricing is a PI when the unit cost is low and the efficiency is low or high; otherwise, there is no PI.

This study is the first that investigates how the retailer develops CPA to implement personalized pricing on a comprehensive spectrum, which can provide practical insights for retailers with different efficiencies.

To examine broadband competition and broadband penetration in a set of countries that employ the same regulation framework. To define the policy and strategy required to promote broadband in weak markets that do not employ alternative infrastructures.

Study penetration and competition level statistics from 2002 to 2005 in a set of countries with different infrastructures deployed, services provided as well as in their social‐economic structures but employing the same regulation framework. Measure the level of inter‐platform and intra‐platform competition as well as the availability of bitstream access versus the incumbents' shares.

The paper concludes that a mature broadband market is the one that exhibits a high penetration ratio in combination with a high competition level. Bitstream access can counterbalance the inexistence of alternative broadband infrastructures, especially in weak markets. In particular the availability of numerous bitstream access types in combination with the proper price differentiation can fuel broadband adoption in relatively weak broadband markets.

The paper challenges the general rule that only platform (also known as facility) based competition guarantees long‐term growth of the broadband market. Bitstream and resale access do not lag local loop unbundling and can be used in weak markets that do not employ alternative infrastructures to fuel competition in the relevant markets. Different policies and strategies must be followed, in that case, on behalf of the local NRA.

Accommodative competitive entry policies (unbundling, resale and interconnection) yield contestable retail telecommunications markets. The combination of setting efficient prices for network elements and allowing competitors to choose their preferred level of wholesale quality renders the retail market self‐regulating with respect to both price and quality. Any overhang of regulation at the retail level under these conditions is potentially harmful to fostering a competitive market outcome.

The purpose of this paper is to identify drivers and barriers for adopting Social Accountability 8000 (SA8000), a leading global social management standard.

The approach involves combining insights from Institutional Theory with a focus on economic performance to study SA8000 adoption by suppliers operating in a developing economy (i.e. India). Data collection involves interviews with adopters and non-adopters, social standard experts and auditors, and archival data on local working conditions.

This study confirms that customer requests are the major reason for adopting SA8000 in order to avoid loss of business. It is noteworthy, however, that those customer requests to adopt SA8000 are often symbolic in nature, which, in combination with the lack of a positive business case, hinders effective implementation.

The findings imply that symbolic customer requests for SA8000 adoption induce symbolic implementation by suppliers, a “supply chain effect” in the symbolic approach. Substantive requests in contrast lead to more substantive implementation and require customer investment in the form of active support and an interest in the standard’s implementation, context and effects.

This study is original in that it addresses social sustainability from a supplier’s perspective, using the lens of Institutional Theory. The value lies in demonstrating the “supply chain effects” that arise from the “quality” of customer requests: a purely symbolic approach by customers leading to symbolic implementation vs the merits of substantive customer requests which stimulate substantive implementation.

The purpose of this paper is to examine minority squeeze-outs and their regulation in Germany, a country where majority shareholders have extensively used this tool since its introduction in 2002. Using unique hand-collected data, the authors carry out the first detailed analysis of the German squeeze-out offers from the announcement to the outcome of post-deal litigation, examining also the determinants of the decision to squeeze-out minority investors.

Using unique data on court rulings and compensations, the authors analyze a sample of 324 squeeze-outs of publicly listed companies from 2002 to 2011 to carry out the first detailed analysis of the squeeze-out procedure and the post-deal litigation. The authors employ the event study methodology to assess the stock market reaction around the announcement of the squeeze-out.

Large firms with foreign large shareholders are the most likely to be delisted. Positive stock price performance increases the likelihood of a squeeze-out, but operating performance has the opposite effect. Stock prices react positively to squeeze-out announcements, in particular when the squeeze-out does not follow a previous takeover offer. Post-deal litigation is widespread: nearly all squeeze-outs are legally challenged by minority shareholders. Additional cash compensation is larger in appraisal procedures, but actions of avoidance are completed in less time. Overall, the evidence suggests that starting post-deal litigation by challenging the cash compensation offered in a squeeze-out delivers high returns for minority investors.

The lack of data concerning the identity of minority shareholders in firms undergoing a squeeze-out does not allow a proper investigation of the incentives of the different types of investors.

The paper provides evidence about the incentives of the different players in a squeeze-out offer. The findings of the paper could be helpful in assessing the impact of the squeeze-out rule. The results also contribute to the understanding of minority investors’ incentives to start post-deal litigation.

This paper provides new evidence about post-deal litigation, in particular how investors use the procedures that the system provides them to protect themselves against controlling shareholders. The paper examines all the phases of the squeeze-out procedure and challenges.