Chile's Competition Tribunal announced last Wednesday that
it has rejected a predatory pricing complaint against two furniture
manufacturers, as the companies lack a high enough market share to
be considered dominant.
Furniture company Metalurgica Silcosil made the complaint to the
specialist tribunal, which is a division of Chile's competition
watchdog, against rivals Masisa and Masisa Componentes. The two
companies respectively manufacture ready to assemble furniture and
wooden furniture components.
In its March 2015 complaint, Silcosil claimed the two Masisa
companies had engaged in predatory pricing and margin squeezing,
and copied Silcosil's intellectual property. Silcosil said the
behaviour took place across Chile and had had significant effects
on both its business and consumers throughout the country.
Silcosil said the Masisa companies could afford to sell its
products at a 30 per cent discount because it could make up the
revenue from sales through its component business, which sells to
consumers and other businesses including Silcosil. Silcosil claimed
the behaviour has already cost it 8.8 million pesos
The court split the decision into two separate markets. The
upstream market consisted of the production and marketing of
furniture components. The downstream market was for the design and
manufacture of ready to assemble furniture.
In the downstream market, the court ruled that Masisa had too
low a market share to be considered dominant, and therefore could
not be engaged in illegal predatory pricing.
In the upstream market, the court also decided Masisa
Componentes was not a dominant company. It ruled that Masisa's
market share had fallen in recent years, and that boards from
different producers were substitutable for the company's
The tribunal did not go into the substance of the case, instead
relying on the small market share to make its decision –
although one dissenting judge ruled the companies did have a high
enough market share for this to be considered an antitrust
Ricardo Riesco at Philippi Prietocarrizosa Ferrero DU &
Uría (Chile) said the judgment showed how difficult is was
to successfully bring private litigation against predatory pricing
and margin squeezes.
Riesco said that without the backing of Chile's competition
enforcer, the National Economic Prosecutor, "most of these
lawsuits are like jumping into a pool you do not know for sure has
water in it."
Julio Pellegrini Vial at Pellegrini & Cia, who acted for
Silcosil, said the company will probably appeal against the ruling
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