Many states have "predatory pricing" laws where predatory pricing is defined as "sales below cost by a dominant firm over a long enough period of time for the purpose of driving a competitor from the market; the predator firm then raises prices to supracompetitive levels to recoup its losses and render the practice profitable." They are commonly called "sales-below-cost" laws.
The state of Wisconsin was the first state to file a complaint againt Walmart in 2001 for predatory pricing:
Quote:
Oct. 1, 2001
WAL-MART SETTLES PREDATORY PRICING CHARGE
Wal-Mart admits no wrongdoing and will not pay a fine in a settlement reached with the Wisconsin Department of Agriculture, Trade, and Consumer Protection over a predatory pricing complaint filed by the agency last year. The company will, however, face double or triple fines for any future violations, according to the terms of the agreement.
The complaint accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods below cost at stores in Beloit, Oshkosh, Racine, Tomah, and West Bend. A bottle of laundry detergent that cost Wal-Mart $6.51, for example, was sold for less than $5 at several stores. The company's intention, according to the complaint, was to force competitors out of business, gain a monopoly in local markets, and ultimately recoup its losses through higher prices. State officials filed the complaint after Wal-Mart failed to take corrective action following several warning letters sent as early as 1993.
Although most, if not all, states have received numerous complaints from small business owners about Wal-Mart's anti-competitive practices, Wisconsin is the first state to investigate predatory pricing at the company's outlets and file a formal complaint.
http://www.newrules.org/retail/news_...slug&slugid=82
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Predatory pricing is difficult to prove, particularly the "intent" to drive competitors out of business.
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Originally Posted by Ustwo
A poor quality orthodontist about a mile from me has cut her fees to well below mine in an attempt to syphon business from me.
I wish the government would step in and get rid of this unfair competition.
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UStwo.....if her practice was larger than yours (e.g. she had a chain that dominated the orthodontist practice in your state) and she was pricing below cost ONLY at the one near you (making profit at her other locations) for the purpose of driving you out of business, then raising her prices again after you have been effectively removed from the market...
.... you might very well have a predatory pricing complaint.