predatory pricing


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predatory pricing

a PRICING strategy which is aimed at the removal of troublesome competitors. It can take a number of specific forms including selective price cutting on particular brands or selective price cuts in particular sales territories, and the application of a PRICE SQUEEZE by a vertically-integrated supplier on non-integrated rivals. See PRICE WAR, LOSS LEADER, DUMPING, COMPETITION POLICY.

predatory pricing

a pricing policy pursued by a firm (or firms) with the express purpose of harming rival suppliers or exploiting the consumer. Examples of the former include PRICE SQUEEZING and ‘selective’ price cuts to drive competitors out of the market, while exploitation of the consumer comes about through overpricing by MONOPOLY suppliers and CARTELS. See also COMPETITION POLICY.
References in periodicals archive ?
For example, in a predatory pricing case, the major premise would be that economic theory teaches that above-cost price cuts are never anticompetitive.
For example, in an antitrust suit in Indianapolis, a grocery chain was accused by another grocery company of engaging in predatory pricing activities during an 18-month period.
First it was alleged predatory pricing, a charge dropped after lengthy proceedings.
If a firm's prices are higher than everyone else's, that implies monopoly power; if everyone's prices are the same, collusion may be alleged; and prices "too low" can signify cutthroat competition and predatory pricing. No one is innocent.
That hypothesis, however, must be rejected (and subsequently was rejected by the FCC) because Deutsche Telekom cannot engage in predatory pricing and cross-subsidization in the U.S.
The authors examine the charge that major airlines practice predatory pricing to drive out smaller competitors.
You said in your editorial, "Wal-Mart should be applauded for bringing in lower prices rather than castigated as a predator." If this is not predatory pricing then I am a newspaper editor.
Predatory pricing is a classic problem in antitrust enforcement.
A small band of economists and lawyers associated with the University of Chicago attacked the conventional wisdom, knocking out the theoretical underpinnings of antitrust law in general and the theory of predatory pricing in particular.
While such predatory pricing can lead to lower prices in the short term, consumers are worse off in the long run, once the victim of the predatory strategy is marginalised or leaves the market.
Summary: Brussels [Belgium], July 18 (ANI): The European Union Commission has slapped a fine of 242 million euros on Qualcomm for engaging in predatory pricing.