Predatory Pricing Overview • Predatory pricing is a form a anticompetitive conduct which is often brought under §2 • “Predatory pricing ” – a firm’s attempt to drive a competitor out of business , or to discourage a potential competitor from entering the market, by selling its output at an “artificially” low price • Tension…usually antitrust tries to ensure low prices. ..here, it may condemn low prices o It is important NOT to condemn low prices which are a result of superior efficiency • Since 1975, very FEW plaintiffs have won predatory pricing cases o See, e.g. Brooke Group (court was very skeptical of the predatory pricing claim) • Prof. Crane is very skeptical of predatory pricing claims Two Part Test – Brooke Group v. Brown and Williamson Tobacco (1993) • (1) pricing below some measure of cost • (2) ability to recoup • NOTE…this 2 part test only concerns the “conduct” element of a §2 attempted
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This note was uploaded on 02/14/2008 for the course LAW 7557 taught by Professor Crane during the Fall '07 term at Yeshiva.