Predatory Pricing

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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.

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