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| Authored by: Ian Al on Saturday, October 06 2012 @ 03:21 AM EDT |
I think that loss leaders are (can be?) illegal in Europe and the USA. However,
I don't think that it is under consumer legislation.
I think that it is
the 'predatory pricing' that is the issue. It is unfair trading that is
illegal.
The Supreme Court said:"The purpose of the
[Sherman] Act is not to protect businesses from the working of the market; it is
to protect the public from the failure of the market. The law directs itself not
against conduct which is competitive, even severely so, but against conduct
which unfairly tends to destroy competition itself. This focus of U.S.
competition law, on protection of competition rather than competitors, is not
necessarily the only possible focus or purpose of competition law. For example,
it has also been said that competition law in the European Union (EU) tends to
protect the competitors in the marketplace, even at the expense of market
efficiencies and consumers."
Wikipedia:In business and
economics, predatory pricing is the practice of selling a product or service at
a very low price, intending to drive competitors out of the market, or create
barriers to entry for potential new competitors.
If competitors or
potential competitors cannot sustain equal or lower prices without losing money,
they go out of business or choose not to enter the business. The predatory
merchant then has fewer competitors or is even a de facto monopoly, and
purportedly could then raise prices above what the market would otherwise
bear...
United States
Predatory pricing practices may
result in antitrust claims of monopolization or attempts to monopolize.
Businesses with dominant or substantial market shares are more vulnerable to
antitrust claims. However, because the antitrust laws are ultimately intended to
benefit consumers, and discounting results in at least short-term net benefit to
consumers, the U.S. Supreme Court has set high hurdles to antitrust claims based
on a predatory pricing theory.
The independent US shopkeeper with
the loss-leader TV in the window is unlikely to trip over the high
hurdle.
In the case of a declaration made by a patent holder under the
aegis of an international standards organisation, that is not making an
invitation to bargain. FRAND is not defined. It cannot, of itself, be shown to
be a loss leader because it is not leading to a monopoly gained by anti-trust
action by the patent-owner.
The declaration is of the intention to make
the patented invention widely available by a non-monopoly licensing policy with
a fair, rather than unfair, pricing policy. The declaration is not an invitation
to bargain, unlike the TV in the window. It cannot offer a binding contract. It
cannot be unfair trading because it is not a trading
activity.
---
Regards
Ian Al
Software Patents: It's the disclosed functions in the patent, stupid! [ Reply to This | Parent | # ]
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| Authored by: Anonymous on Sunday, October 07 2012 @ 01:27 AM EDT |
I believe you mean bait-and-switch. Bluntly, pull the sucker in with an amazing
bargain and then denigrate the "bargain" to switch the sucker to
something more profitable.
As to predatory pricing, see Utah Pie vs. Continental Baking, a SCOTUS decision
based on the Clayton and Robinson-Patman Acts.
Marketer[ Reply to This | Parent | # ]
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