Comment by knowitnone3
Comment by knowitnone3 5 days ago
Illegal in what way? They are not allowed to set prices lower than competitors or raise them at any time?
Comment by knowitnone3 5 days ago
Illegal in what way? They are not allowed to set prices lower than competitors or raise them at any time?
Selling items for less than they cost to produce is known as "dumping" in international trade (where it is generally disallowed by trade organizations) and can be illegal in the US if the intent is to eliminate competition [0]. That last factor can be hard to prove, and I don't think the FTC is doing much about anticompetitive behavior these days.
[0]: https://www.ftc.gov/advice-guidance/competition-guidance/gui...
Standard grocery margins are usually lower, in the 30%-40% range, and are often much lower for promotional items. Rotating "loss leaders" to get people in the door are standard practice. IMHO that would make it hard to bring an antitrust action against a grocery chain, as pretty much every store engages in a limited amount of predatory pricing as a marketing technique.
50% is the standard retail markup, but it varies by industry.
The Biden admin went slightly harder against anti-competitive actions and anti-consumer actions by companies and all the billionaires freaked out and poured money into Republican campaigns in 2024 in order to roll all that back.
To add onto sibling comment: it is specifically when they sell below cost to eliminate competition, with the goal of later being able to raise prices to recover those losses (and more) once they are the only player in town and can jack the prices up all they want. The later price elevations are what result in consumer harm, which is why it is illegal.
Predatory pricing:
A big gorilla comes in and under prices the entire market. They can do that because they already have tons of money. They do this long enough to break the market and drive the competition out of business. Once the competitors are gone they jack up the prices to unprecedented levels because there's no more alternatives available and bleed the market for all the money.
Regular pricing:
Charge a fair price based on actual costs.
This presupposes some athletic new competitor can’t enter the market and take the margin off the fat incumbent.
It’s why we have capital markets: If capturing a profitable opportunity requires spending some money, someone who wants to profit will send that money your way.
No it means it’s illegal and enforcement agencies don’t have the means and/or political support to prosecute.
> Amazon duped his product and sold it at something crazy, like half price
Pricing below an appropriate measure of cost is generally considered predatory pricing. It is very difficult to enforce this, but that doesn't change the fact that it could be illegal and a violation of antitrust laws.
Predatory pricing is illegal in the US, but difficult to prosecute under the existing laws.