The Law and Economics of Margin Squeezes in the US Versus the EU

Introduction:

"The article is organised as follows. In Section B, the concept of a margin squeeze is defined and necessary conditions for a margin squeeze to exist are described. This section explains the differing conceptualisations of a margin squeeze in the EU and the US, and relates these differences to the concept of terms of trade. Section B also addresses practical and theoretical effects associated with margin squeeze liability. In Section C, the relationship between the Alcoa margin squeeze test and the “as efficient competitor” test is explained, and the components of these two tests are described. In addition, Section C offers reasons for when a margin squeeze may not generate anticompetitive effects. Finally, Section D provides a conclusion."