My teaching and research generally focuses on taxation, especially international tax. However, I have always had an outsider’s fascination with antitrust law and policy. So when I saw a recent article entitled: Economic Analysis and Evaluation of ‘Fair Prices’: Can Antitrust and International Taxation Learn from Each Other? I was intrigued and couldn’t resist. The article, by Alessandro Turina and Nicolo Zingales explores the economic analysis of pricing and comparability in the transfer pricing regime of international tax and in the competition (antitrust) law of excessive and predatory pricing. Their perspective is global as they draw upon U.S. law, E.U. law, OECD practice, and the distinctive outlook of various European countries.
The authors are restrained in their claims and comparison–they acknowledge the differences in purpose and structure between transfer pricing and antitrust laws. But compelling parallels exist that command our attention. Both regimes rely heavily on price-based analysis in which the underlying methodologies struggle to determine “comparability.” Moreover, both strive to find the appropriate balance among legal certainty, administrability, and burden of proof as between business and government. The article provides a baseline introduction to transfer pricing and competition law, thereby allowing the generally informed reader the ability to understand the place of price analysis in each regime and the challenge of determining comparability. Continue reading "The Promise–and Limits–of Economics in Law"