Eliot G, Daniel Deronda (1876). It is possible, because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few. United States v Aluminum Co of America 148 F2d 416 at 427 (2d Cir 1945) per Learned Hand J. Business and the Law 1130 Andrew, Terry, and Giugni Des. <i>Business & the Law</i>, Thomson Reuters (Professional) Australia Pty Limited, 2016. ProQuest Ebook Central, . Created from wsudt on 2019-09-25 19:52:07. Copyright © 2016. Thomson Reuters (Professional) Australia Pty Limited. All rights reserved.
though, where a corporation with the requisite market power is, in the absence of countervailing evidence that its pricing was not aimed at destroying actual or potential competition, selling at below average variable cost there may be grounds for inferring that it is taking advantage of its power for a proscribed purpose. EASTERN EXPRESS PTY LTD V GENERAL NEWSPAPERS PTY LTD [22.1900] Eastern Express Pty Ltd v General Newspapers Pty Ltd  FCA 321 The conduct of an established suburban newspaper in lowering its advertising rates in response to the entry of a competitor into that market was held not to breach s 46 of the TPA. Wilcox J at 52,895-900 commented that: Conceptually, predatory pricing – that is the deliberate lowering of prices to levels which will drive competitors out of the market and enable the predator then to raise prices to levels unconstrained by competitive activity – is … anti-competitive conduct. In the short term, the effect of predatory pricing is to boost competition and to benefit purchasers. But, in the long term, competition is reduced, and purchasers disadvantaged, because of a reduction in the number of market participants … [The] outward manifestation of a decision to engage in predatory pricing is a lowering of prices, an action which, on its face, is pro-competitive. The factor which turns mere price cutting into predatory pricing is the purpose for which it is undertaken. That will often be difficult to prove Traders rarely admit the existence of a proscribed purpose In the absence of inference from other circumstances, the court will be faced with the question: what price-cut effect is sufficient to warrant the inference that the cuts were undertaken for a proscribed purpose? … Traders commonly fix prices with the intention of diverting to themselves custom which would otherwise ﬂow to their competitors. In doing so, they realise that, if they are successful, the result will be to damage – in extreme cases, even to eliminate – those competitors. But such conduct is the very stuff of competition, the result which Part IV seeks to achieve. It would be surprising if parliament intended to proscribe competitive conduct when undertaken by a company with sufficient resources to compete effectively. Something more must be required …
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