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Topic: Predatory pricing

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	Predatory pricing - Wikipedia, the free encyclopedia
		However, it is usually difficult to prove that a drop in prices is due to predatory pricing rather than normal competition, and predatory pricing claims are difficult to prove due to high legal hurdles designed to protect legitimate price competition.
		In either case, this forces the predatory pricing period to become prolonged until possibly even the predator itself is forced to forfeit the expected gain.
		Proponents of the theory that predatory pricing is irrational
	en.wikipedia.org /wiki/Predatory_pricing (1694 words)

	Predatory pricing (Site not responding. Last check: 2007-11-03)
		Predatory pricing occurs when a company sets an unrealistically low price for the purpose of forcing a competitor to withdraw from the market.
		Price cutting or underselling competitors is not necessarily predatory pricing, but when such techniques are used by a business with substantial market power for the purpose of getting rid of competitors, it is considered to be a misuse of that market power.
		The intention of the price cutting must be to eliminate or substantially damage a competitor, prevent the entry of a person into the market or deter or prevent a person from engaging in competitive conduct in a market.
	www.accc.gov.au /content/index.phtml/itemId/322986 (361 words)

	Is Predatory Pricing Legislation Worth It
		Price cutting is believed to be beneficial for the competitive process and especially beneficial for consumers, but the price cut is just one aspect of predatory pricing.
		This links the issue of predatory pricing with the issue of collusion because, if BBM is able to collude, make agreements, and build trust with other firms in the market, the firms could coordinate collectively and act as one, making the task of running a firm from the market less risky.
		Predatory pricing may be commonplace in winner-takes-all markets in which high profits depend on having a large base of customers early on.
	members.fortunecity.com /ketthia/ku-files/predatory-pricing.html (3996 words)

	Legal Issues Regarding Predatory Pricing Of Pharmaceuticals
		The issue of how to define "market" in the predatory pricing context is important in potential pharmaceutical cases because of the differences between the specific drugs and their respective classes which a firm may manufacture.
		Price trends in prescription drugs The hyperinflationary rise in drug prices in 1980s was due to two factors: strong patent protection which allowed drug manufacturers to enjoy virtual monopolies within key pharmaceutical markets, and the inelasticity of drug prices.
		Whereas it is questionable whether to hold providers participating in predatory pricing schemes to antitrust liability, it is in the public interest to punish those providers who actively seek out alignment with insurers which participate in predatory pricing schemes and the provider also operates under a capitation agreement with that insurer.
	www.lectlaw.com /files/ant07.htm (6001 words)

	[No title]
		Predatory pricing is defined as "pricing at a level calculated to exclude from the market an equally or more efficient competitor.
		Pricing at a level to exclude a less efficient competitor is, of course, what competition is supposed to do" [Viscusi, Vernon, and Harrington p.
		Economic historian John McGee is sharply critical of the view that the predatory pricing played a significant part in the rise of Standard Oil [ See McGee, "Predatory Pricing Cutting: The Standard Oil Case," Journal of Law and Economics, October 1958].
	www.clt.astate.edu /crbrown/predatory.htm (419 words)

	SSRN-The Paradox of Predatory Pricing by Daniel Crane
		SSRN-The Paradox of Predatory Pricing by Daniel Crane
		In addition to making theoretical claims about the chilling effects of predatory pricing law, the article reports the results of two surveys, one concerning the compensation structure of plaintiffs' attorneys in predatory pricing cases and one concerning predatory pricing counseling by in-house lawyers and the effects of predatory pricing law on firms' pricing decisions.
		Crane, Daniel A., "The Paradox of Predatory Pricing".
	papers.ssrn.com /sol3/papers.cfm?abstract_id=724166 (256 words)

	Chapter 7
		Predatory pricing is the practice of selling a good or service at a loss in order to drive competitors out of the market, and thereby increase the market power of the predator firm, allowing the firm subsequently to raise prices above the levels that prevailed before the predatory pricing began.
		Predatory pricing with malice to eliminate competitors and thus enjoy a subsequent recoupment is indeed difficult to prove.
		While predatory pricing might have to be viewed differently in the federal area compared to state litigation, nevertheless the increasing power of the chains requires federal review in terms of applicable statutes and regulations designed to protect small business and to provide free market opportunities.
	www.lawmall.com /rpa/chap7.html (7384 words)

	Webguild Sentinel Airlines Predatory Pricing
		And when it comes to predatory pricing -- which is always difficult to prove in court -- the Bush team will have plenty of leeway.
		In theory, the price charged for a seat should be compared to the cost of filling that extra seat.
		But, besides an extra package of peanuts, the cost of flying an additional passenger is practically nothing; regardless of the number of travelers on a flight, the pilot and flight attendants still must be paid and the aircraft requires the same amount of fuel.
	www.webguild.com /sentinel/airline_predatory_prices.htm (1377 words)

	Competitive Enterprise Institute
		This new competition keeps the predator from recouping the losses it necessarily incurred by pricing below cost during the predation period; hence, the threat of new entry is generally sufficient to keep firms from predatorily pricing in the first place.
		Predatory pricing hurts the predator more than the prey.
		This article is adapted from their CEI paper "How the Market Self-Polices Against Predatory Pricing".
	www.cei.org /gencon/005,01329.cfm (2814 words)

	Techdirt: Predatory Pricing: Any Price That's Better Than Mine (Site not responding. Last check: 2007-11-03)
		On example of predatory pricing is when one large discounter lowered its prices on preccription drugs with the intent of driving out all the small pharmacies.
		Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market, or create a barrier to entry into the market for potential new competitors.
		Predatory pricing is a theory, not a fact.
	techdirt.com /articles/20060630/1231208.shtml (2666 words)

	Unit 1: Predatory Pricing
		Predatory pricing is the practice of providing services at prices that are low enough to drive competitors out of a market, so as to monopolise the market.
		Predatory pricing is a particularly difficult type of conduct to prove in the telecommunications industry.
		Oftel concluded that BT was not engaged in predatory pricing in its BTNet offers, Oftel did state its intention to continue to monitor the situation closely (given BT’s potential influence over the market).
	cbdd.wsu.edu /kewlcontent/cdoutput/TR503/page50.htm (579 words)

	Rival Calls Microsoft's Security Pricing 'Predatory,' 'Ruthless' - Windows News by InformationWeek
		Microsoft's priced its consumer and enterprise security software at levels so low that it's putting the entire security software ecosystem at risk, the chief executive of a Florida company said Wednesday.
		How Microsoft prices its security products has been a concern of security analysts and vendors since at least February, when the company set the cost of its Windows Live OneCare security subscription service at $49.95.
		In his blog Tuesday, Eckelberry posted an analysis of Microsoft's pricing of its $49.95 consumer-oriented OneCare, and its Antigen messaging security line, which was announced earlier this month.
	www.informationweek.com /windows/showArticle.jhtml?articleID=189600302 (353 words)

	Microsoft Monopoly, Natural Monopoly, Predatory Pricing, Bill Gates, Price Discrimination, Antitrust
		Predatory pricing is the major tool that Microsoft uses to establish its various monopolies.
		Price discrimination was one method of coercion that Microsoft used with the OEMs to have them distribute MS Office, part of the reason why these contracts were secret.
		There are some who believe that predatory pricing is a myth and that antitrust laws are no longer relevant or useful in today's high-tech economy.
	thismatter.com /Articles/Microsoft.htm (18501 words)

	Ashland Daily Tidings :: Online Edition
		The price difference raises the issue with city officials of whether Charter, the nation's third largest cable company, has engaged in predatory pricing against the Ashland Fiber Network, the City of Ashland's cable television and high-speed Internet service.
		Under federal law, it is illegal to discriminate in price between different consumers when the effect is to lessen competition or create a monopoly.
		Pursuing a predatory pricing case would have required years of expensive litigation, with little chance of success.
	www.dailytidings.com /2005/0303/030305n1.shtml (808 words)

	Competition and Predatory Pricing
		If it was somehow possible for economists or government agents to distinguish those situations in which the monopoly price situation was achieved by luck from those in which it was achieved through market competition, a policy aimed at controlling the lucky monopoly might be supported on purely economic grounds.
		Even if we assume that the monopoly pricing position would exist for the foreseeable future (say, because we have no reason to think that anyone would recognize the opportunity for profit through competition), the income associated with it would be a reward for previous action.
		Since predatory pricing can only be achieved by an entrepreneur who has attained a position to charge a monopoly price, the profit gained as a result of predatory pricing is part of the reward for an earlier innovation.
	www.constitution.org /pd/gunning/subjecti/workpape/predpric.htm (1960 words)

	The Angry Economist (Site not responding. Last check: 2007-11-03)
		There is this widely-held theory that big companies can use their size to out-compete small companies by engaging in predatory pricing.
		Now the market price is ten cents higher, and the profits are even more attractive to a new entrant.
		Predatory pricing doesn't work according to the standard theory.
	angry-economist.russnelson.com /predatory-pricing.html (331 words)

	Pricing strategies - Wikipedia, the free encyclopedia
		These early adopters are relatively less price sensitive because either their need for the product is more than others or they understand the value of the product better than others.
		This is a strategy of pricing adopted by firms in a contestable market in order to 'limit' the ability of new entrants to take advantage of economies of scale where by costs are low enough for them to become competitive.
		Contribution Margin-based Pricing maximizes the profit derived from an individual product, based on the difference between the product's price and variable costs (the product's Contribution Margin Per Unit), and on one’s assumptions regarding the relationship between the product’s price and the number of units that can be sold at that price.
	en.wikipedia.org /wiki/Pricing_Strategies (611 words)

	Techdirt: Should We Welcome Microsoft's 'Predatory' Pricing?
		On the blog of one security company, the case is made that the company is guilty of predatory pricing, in a deliberate attempt to damage the competition.
		Thus there is an illusion that consumers benefit from predatory pricing practices -- it is an illusion because it is short-lived and in the long run the consumer suffers from the reduction of competition and the emergence of a monopolist who can dictate price to the market.
		However, in the US, the definition of predatory pricing was created by anti-trust legislators to deal the idea of a dominant player comes into a market, underprices the competition and then raises prices after the competition is wiped out.
	www.techdirt.com /articles/20060621/1412206.shtml (6138 words)

	11/23/98 DOES PREDATORY PRICING MAKE MICROSOFT A PREDATOR?
		In fact, the courts regard predatory pricing as a so-called legal fiction: It's theoretically against the law but nearly impossible to prove.
		The first to discredit the concept of predatory pricing were members of the free-market ''Chicago School'' of economists.
		The wholesale price it charges PC makers for its Windows PC operating system, for example, has doubled during the past seven years, to as much as $60, critics charge.
	www.businessweek.com /1998/47/b3605129.htm (1199 words)

	Predatory Pricing In An Oligopolistic Framework (SMEALSearch) - Pal,Rangaswamy,Giles,Debnath (Site not responding. Last check: 2007-11-03)
		In this paper we study the nature of predatory behavior in an oligopolistic framework.
		We use the long-purse story of financial vulnerability to demonstrate that predatory behavior is less likely to occur in an oligopoly than in a monopoly.
		We also show how small firms may be less likely targets for predatory attacks than their larger, more efficient rivals, examine the model with uncertainty added, and discuss the model's application to antitrust.
	smealsearch2.psu.edu /4955.html (225 words)

	» Microsoft’s predatory pricing of security software \| Spyware Confidential \| ZDNet.com
		SunbeltBLOG has posted an analysis of Microsoft’s pricing for their new security products, OneCare and Antigen, calling Microsoft on predatory pricing aimed at putting the rest of the security vendors out of business.
		SunbeltBLOG compares the numbers, pricing for the Microsoft products to comparable products from Symantec, Trend Micro and McAfee, showing how Microsoft is undercutting their prices by as much as 44% for OneCare and as much as 63% for Antigen.
		Ryan Naraine’s article here asks if Microsoft’s pricing is predatory or correctional and quotes statements from others in the industry.
	blogs.zdnet.com /Spyware/?p=830 (1509 words)

	Predatory pricing designed to eliminate the Internet service Providers
		It is a clear case of a monopoly using predatory pricing to eliminate competitors.
		Based on Bell Atlantic’s "The ISP Term and Volume Program: Rates", dated October 1999 (which is a rewrite of a previous pricing sheet), Bell Atlantic's pricing will clearly result in competitors never being able to compete against Bell Atlantic retail.
		Bell Atlantic’s ADSL pricing is based on volume discounts and, for the most part, is sold with a five-year contract.
	newnetworks.com /baadslscrewisp.htm (979 words)

	BW Online \| May 14, 2001 \| Commentary: Predatory Pricing: Cleared for Takeoff
		The suit's failure means the virtual end of predatory pricing as an antitrust issue for the foreseeable future.
		While Marten acknowledged that predatory pricing existed, he doubted that judges would be able to distinguish it from good, old-fashioned competition.
		"Identifying [predatory pricing] in the particular case without chilling aggressive, competitive pricing is far beyond the capacity of any antitrust tribunal," he wrote, quoting from a well-known antitrust treatise.
	www.businessweek.com /magazine/content/01_20/b3732075.htm (826 words)

	Reference.com/Encyclopedia/Predatory pricing
		Predatory pricing is the practice of a firm selling a product at very low price with the intent of driving competitors out of the market, or create a barrier to entry into the market for potential new competitors.
		Brown & Williamson Tobacco, and the Federal Trade Commission has not successfully prosecuted any company for predatory pricing since.
		Proponents of the theory that predatory pricing is irrational argue that it must be a larger firm that engages in the practice, in order to be able to withstand the losses longer than its competitors.
	www.reference.com /browse/wiki/Predatory_pricing (1676 words)

	» It’s official: Google launches ‘Checkout’ with predatory pricing model aiming to ...
		Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing.
		A successful predatory pricing scheme must, after discounting, pay out more during the recoupment phase than it costs the predator during the preceding low-price phase.
		The longer the duration of the first phase and the greater the volume of sales during this phase, the greater must be the payoff during recoupment.
	blogs.zdnet.com /micro-markets/index.php?p=178 (937 words)

	SSRN-Stopping Above-Cost Predatory Pricing by Aaron Edlin
		Since 1993 when the Supreme Court decided Brooke Group, no predatory pricing plaintiff has prevailed in a final determination in the federal courts.
		Under existing interpretations of the Sherman Act, American can price very high, so high that entry would be attractive to even higher cost firms, except that once they do enter, American can use its advantages to make sure that entrants lose money without American losing money.
		This article proposes an interpretation of Sherman Act section 2 that would give monopolies the incentive to price low in the first place, before entry, because under this interpretation they are not allowed to drive firms from the market after entry.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=269162 (411 words)

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