Price discrimination law : developing a policy for New Zealand.
Degree GrantorUniversity of Canterbury
Degree NameMaster of Commerce
The purpose of this thesis is to develop a policy towards anticompetitive price discrimination in New Zealand. Price discrimination occurs where the ratio of price to cost in two sales differs. Legislation against price discrimination may be enacted as part of our Competition Law, a set of laws designed to promote efficiency and competition in industry and commerce. The first section of this thesis examines the economics of price discrimination and its effects on efficiency, income distribution and competition. We conclude that the effects are ambiguous and depend upon the circumstances in which the discrimination is practiced. However we conclude that systematic price discrimination can be harmful to competition, whilst unsystematic price discrimination can promote competition and that there are a priori grounds for anti-price discrimination legislation. The second section examines specific approaches taken to price discrimination legislation. Particular emphasis is placed on the U.S. Robinson-Patman Act which is one of the most extensively litigated price discrimination laws in the world. A review of the implementation of this Act shows that it has failed to promote competition or increase efficiency. In fact, it has done more to inhibit these goals than promote them. We conclude that there are conceptual problems with antiprice discrimination legislation and this conclusion is reinforced by a study of the Australian price discrimination law. We therefore examine the conceptual framework in which price discrimination is controlled in other developed countries such as the United Kingdom, Canada, Eire, France, West Germany and the EEC. We conclude generally that price discrimination is a problem of monopoly and should be treated as such. The final part of this thesis reviews price discrimination law in New zealand and suggests a policy that would align the Commerce Act with our conclusion that legislation against price discrimination is undesirable.