Predatory price cuts harm competition regardless of the seller’s intent

Evidence

A fourth class of sales below cost is typified by the gas pump loans in this case. These price cuts are predatory. They are usually made with the purpose of driving out competitors. But whether or not the corporation making them has this purpose clearly in mind, they tend necessarily to lessen competition by tying purchasers to a particular supplier instead of leaving them in a position to buy freely in a fluid and competitive market. They thus enable business units with the greatest capital resources unfairly to drive out smaller businesses unable to make such loans, or else unfairly to diminish the smaller businesses’ share of the market. They have no compensating. economic advantage in t’ie improvement of quality or service or in the lowering of price. On the contrary, when made by a firm which is already dominant or acquiring dominance in a marketing area, they enable the firm to secure a position of price leadership and so to lessen or eliminate price competition. — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process, 564

Categorization

• XREF: Ties to the volume’s distinction between subjective-purpose and objective-effect tests of liability under antitrust law. — connects to: Congress created the 1914 antitrust laws to override judicially invented purpose tests — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process: Basic Problems in…, 545; Price discrimination generally does not create monopoly or harm competition — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1144; Price fixing among small-market-share firms should not be per se illegal — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1145

Broader Connections

• Price discrimination generally does not create monopoly or harm competition #qualifies (0.78) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1144
• Price fixing among small-market-share firms should not be per se illegal #contradicts (0.72) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1145