Predation Analysis and the FTC’s Case against Intel

The Federal Trade Commission\u27s pending antitrust case against Intel challenges a number of Intel\u27s 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