8.3 Paper - Predators - In business there are many(too many...

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In business, there are many (too many) predatory practices. These can be detrimental not only to the consumer, but also shareholders and stakeholders as well. One example of a predatory business practice that is multi-faceted is unethical pricing. This encompasses the practices of excessive pricing, deceptive pricing, predatory pricing and price fixing. Excessive pricing is more commonly known as price gouging, where the fair price for goods or services has been exceeded. We usually hear this term in regards to the petroleum industry or the pharmaceutical industry. In Biotechnology Industry Organization v. District of Columbia , plaintiffs in the pharmaceutical industry brought action against the District of Columbia which revolved around what the District deemed “excessive” pricing unlawful. The Court’s ruling was that the law the defendant cited was unconstitutional and was preempted by the Patent Act (Biotechnology Industry Organization v. District of Columbia). We may also hear the term price gouging in the aftermath of severe storms, where previously plentiful goods are in short supply and store owners charge unreasonable markups for those commodities which are in short supply (Byas, 2013). Deceptive pricing is a practice in which a company prices their products in such a way that it obscures the true cost. Practices such as making false price comparisons, omitting important conditions of the sale or providing misleading suggested selling prices are examples of deceptive pricing. In 2011, China fined Wal-Mart for misleading prices at some of their stores (Zhu & Huiwen, 2011). In retail, an example of potentially deceptive pricing is “high-low” pricing, which involves setting prices at an initially high level for a brief period of time and then
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discounting the merchandise. This practice was the basis for the case State of Colorado v. May
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