MDPPACPB Regulations

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(b) 
Require the licensee to maintain a minimum margin that enables 
downstream rivals to compete (based on an equally efficient competitor test); 
 
(c) 
Impose structural or functional separation between the licensee’s 
midstream and downstream business units; 
 
(d) 
Mandate publication of non-discriminatory wholesale prices and 
access terms; 
 
(e) 
Impose penalties in accordance with Part XVII of these 
Regulations. 
 
(6) 
Transparency and Reporting Obligations 
Dominant vertically integrated licensees shall: 
 
(a) 
Submit wholesale and retail price schedules to the Authority upon 
request; 
 
(b) 
Maintain detailed internal cost and margin reports to enable 
regulatory audit; 
 
(c) 
Certify annually that pricing structures comply with this Regulation 
and do not result in margin squeeze against competitors. 
 
 
23. Prohibition of Predatory Pricing 
   (1)    Prohibition 
No Licensee shall sell below cost for a sustained period with the intent or effect 
of eliminating competitors, disciplining market rivals, deterring entry, and 
thereafter recouping losses through increased prices or market power. 
  (2) 
Definition of Predatory Pricing 
For the purposes of this Regulation, predatory pricing means: 
 
(a) 
Deliberately setting prices below an appropriate measure of 
cost—such as average variable cost, marginal cost, or any other cost 
benchmark determined by the Authority; 
 
(b) 
Sustaining such pricing for a sufficient period to impair or eliminate 
competitors; and 
 
(c) 
Demonstrating the ability and intent to recoup the resulting losses 
through subsequent price increases or market power once competition is 
reduced. 
(3) 
Illustrative Examples 
Conduct that may constitute predatory pricing includes, but is not limited to: 
 
(a) 
A dominant pipeline operator drastically under-pricing its 
transport tariffs in corridors served by a new entrant pipeline, subsidizing losses 
with profits from monopoly routes; 
 
(b) 
A major branded retail chain offering fuel at unrealistically low 
prices in a specific locality with the objective of driving out independent retail 
stations, followed by subsequent price hikes once rivals are eliminated; 
 
(c) 
A wholesale gas distributor offering temporary below-cost rates 
targeted specifically at regions where new competitors have recently entered, 
with no commercial justification tied to efficiency or scale. 
(4) 
Assessment Criteria by the Authority