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  1. #1
    One More Time

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    Default predatory pricing

    What is Predatory Pricing?
    Generally, the following elements must exist to constitute predatory pricing:


    The predator must have market power to unilaterally increase its prices.

    The predator must charge prices that fall below a predatory price standard. (This standard varies somewhat between countries.)

    Generally, in competition law, prices in this sector must be below average Total Costs, and near or below Average variable Costs. In the telecommunications sector, prices must usually be below Long Run Incremental Costs (LRIC) or Total Service Long Run Incremental Costs (TSRIC). (See Appendix B for a discussion of these costs standards).

    There must be evidence of a clear policy of selling at predatory prices, not just sporadic or reactive price cutting.

    Normally, there must be a reasonable expectation that the predator will be able to recoup its losses after its predation ends (e.g. after competitors are driven out of the market)



    Predatory pricing is often prohibited under national competition laws. It may also be prohibited under the laws or policies applied by a telecommunications regulator. Either way, it will be necessary for the regulator to have the means to investigate and stop instances of predatory pricing and to implement suitable penalties or remedies.


    Remedies vary. Predators may be penalised, competitors which have been the victims of predatory pricing may be compensated, or both. Another regulatory approach is to anticipate predatory pricing by implementing price regulation to deter predatory behaviour. Wholesale cost imputation requirements, which are discussed in the previous section, provide an example of the approach.


    Predatory pricing is a particularly difficult type of conduct to prove in the telecommunications industry. As previously discussed, the industry is characterised by substantial joint and common costs which are difficult to assign to particular services.

    Predatory Pricing
    Personally I feel FedEx and a few others are engaging in this activity against YRC, and the IBT leadership needs to bring some attention to it...
    Last edited by snortin nortin; 10-18-2009 at 03:57 PM.

  2. #2
    City Mutant
    Guest

    Default Re: predatory pricing

    Well according to the IBT they are going full throttle for Fed-Ex. Gonna organize 'em. I hope the attempt at least is made. We'll see.

 

 

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