Amicus Brief of Zycher, Manne, Epstein, & Boudreaux in NTE Carolinas v Duke Energy
Summary of Argument
Courts should approach predatory pricing claims with caution because price cutting is central to competition and because false positive errors can chill competition to the detriment of economic efficiency and consumer welfare.
Total average system cost is not an appropriate price floor for finding predation; the district court was right to reject a fixed-cost standard. This Court should reject claims based on the allegedly exclusionary effect of pricing not shown to be below short-run incremental cost. Moreover, a contention that Duke Energy’s discount or rebate structure was “exclusionary” should not change the analysis, because the timing of price reductions should not be relevant.