Editing Predatory pricing (section)

==Legal aspects amongst different countries==
In many countries, there are legal restrictions upon using the predatory pricing strategy as it may be deemed anti-competitive. Although it may not be technically illegal, it can be subject to severe restrictions.

===Australia===
Predatory pricing is illegal in Australia under the [[Competition and Consumer Act 2010]] (formally known as the [[Competition and Consumer Act 2010|Trade Practices Act]]).<ref>{{Cite web |last=Education |title=Tertiary Education Quality and Standards Agency Act 2011 |url=http://www.legislation.gov.au/Details/C2021C00287/Html/Text |access-date=2023-04-24 |website=www.legislation.gov.au |language=en}}</ref> The Act prohibits the use of this particular commercial strategy by dominant firms with significant quantity of the market share within the industry of operation. The Act defines the strategy as a dominant firm employing the method of undercutting or underselling with the intention to force competitors to exit or prevent entry to the industry. The dominant firm can only have significant quantity of the market share in an industry if the firm is not substantially impacted or constrained by its competitors on suppliers and consumers.<ref>{{Cite web|date=2005|title=Predatory Price|url=http://www.austlii.edu.au/cgi-bin/viewdoc/au/journals/AUCCCUpdate/2005/5.html|access-date=1 November 2020|website=Australian Competition and Consumer Commission Update|archive-date=29 June 2022|archive-url=https://web.archive.org/web/20220629062100/http://www.austlii.edu.au/cgi-bin/viewdoc/au/journals/AUCCCUpdate/2005/5.html|url-status=live}}</ref>

In 2017, the Australian government amended the Competition and Consumer Act by introducing an "effects test". This particular test determined engagement in predatory pricing if a firm were discovered to be selling goods or services at prices likely to lead to the lessening of competition in a market industry. This amendment to the Act was one of the changes included in the "Harper reforms" that expanded the predatory pricing definition to include the effect of below-cost prices in lessening competition regardless of firm market power. The Harper reforms were introduced to allow for smaller firms to stand ground amongst larger firms engaging in predatory behaviour and anti-competitive strategies.<ref>Australian Competition & Consumer Commission (ACCC). (2013). Predatory Pricing: A guide to the predatory pricing provisions in the Competition and Consumer Act 2010</ref>

In 2020, further amendments to the Act created a new threshold test to prohibit those engaging in predatory pricing and strengthen the prohibition of market power misuse. These amendments were made in response to the recommendations made during the Harper reforms. The amendments, labelled the "Birdsville Amendments" after Senator [[Barnaby Joyce]], penned the idea<ref>{{citation|url=http://abc.net.au/news/stories/2007/10/04/2050770.htm|title=Predatory pricing laws shock big operators|access-date=2009-03-16|publisher=[[Australian Broadcasting Corporation|ABC Australia]]|date=2007-10-04|archive-date=2009-01-13|archive-url=https://web.archive.org/web/20090113161035/http://www.abc.net.au/news/stories/2007/10/04/2050770.htm|url-status=dead}}</ref> in Section 46, to define the practice more liberally than other behavior by requiring the business to first have a "substantial share of a market" (rather than substantial market power). This was made in a move to further protect smaller businesses from larger players and their misuse of market power.

===Canada===
Section 50 of the ''[[Competition Act]]'', which criminalized predatory pricing, has been repealed<ref>{{cite web|url=http://laws-lois.justice.gc.ca/eng/C-34/page-4.html#codese:50|title=Competition Act (R.S.C., 1985, c. C-34)|website=laws-lois.justice.gc.ca|archive-url=https://web.archive.org/web/20110716052354/http://laws-lois.justice.gc.ca/eng/acts/C-34/page-4.html|archive-date=2011-07-16}}</ref> and replaced by sections 78 and 79, which both deal with the matters civilly.

Section 78(1)(i)<ref>{{cite web | url = http://www.laws.justice.gc.ca/eng/acts/C-34/page-22.html#h-34 | title = Definition of anti-competitive act | work = Competition Act (R.S.C., 1985, c. C-34) | publisher = Department of Justice | access-date = 2017-09-13 | archive-date = 2017-09-13 | archive-url = https://web.archive.org/web/20170913232434/http://www.laws.justice.gc.ca/eng/acts/C-34/page-22.html#h-34 | url-status = live }}</ref> of the ''[[Competition Act]]'' prohibits companies from the selling of products at unreasonably low prices designed to facilitate the effect of eliminating competition or a competitor. The Competition Bureau has established Predatory Pricing Guidelines defining what is considered unreasonably low pricing.

===United States===
Predatory pricing practices may result in [[antitrust]] claims of [[monopoly|monopolization]] or attempts to monopolize. Businesses with dominant or substantial [[market share]]s are more susceptible to antitrust claims. However, as antitrust laws are ultimately intended to benefit consumers, and discounting results in at least short-term net benefit to consumers, the [[Supreme Court of the United States|U.S. Supreme Court]] has set high hurdles to antitrust claims based on predatory pricing theory. The Court requires plaintiffs to show a likelihood that the pricing practices affect not only rivals, but also competition in the market as a whole in order to establish there is a substantial probability of success in monopolization.<ref>{{citation|url=http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=509&invol=209|volume=209|title=Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 113 S. Ct. 2578, 2589|year=1993|access-date=2006-01-31|archive-date=2012-10-18|archive-url=https://web.archive.org/web/20121018114313/http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=509&invol=209|url-status=live}}</ref> If there is a likelihood that market entrants will prevent the predator from recouping its investment through supra-competitive pricing, then there is no probability of success and the antitrust claim would fail. Additionally, the Court established that for prices to be predatory, they must be below the seller's cost.

The US Department of Justice, however, argues that modern economic theory based on strategic analysis supports predatory pricing as a real problem, and claims that the courts are out of date and too skeptical.<ref>{{cite web | url = https://www.justice.gov/atr/predatory-pricing-strategic-theory-and-legal-policy | title = Predatory Pricing: Strategic Theory and Legal Policy | date = 25 June 2015 | publisher = Department of Justice | access-date = 7 October 2017 | archive-date = 7 October 2017 | archive-url = https://web.archive.org/web/20171007120059/https://www.justice.gov/atr/predatory-pricing-strategic-theory-and-legal-policy | url-status = live }}</ref>

===European Union===
[[Article 102 of the Treaty on the Functioning of the European Union]] is the relevant statutory provision under EU law for dealing with predatory pricing. According to Article 102:<blockquote>''"Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States."'' <ref>{{Cite web|title=Consolidated Version of the Treaty on European Union and the Treaty on the Functioning of the European Union [2008] OJ C115/01, Article 102|url=https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E102:EN:HTML|date=May 9, 2008|access-date=April 22, 2020|archive-date=May 2, 2020|archive-url=https://web.archive.org/web/20200502151753/https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E102:EN:HTML|url-status=live}}</ref> </blockquote>If Article 102 is breached by a predatory pricing practice, the European Commission may intervene as they prioritize dealing with "exclusionary abuses" which exclude competitors from the market.<ref>{{Cite web|title=Guidance on the Commission's Enforcement Priorities in Applying Article 82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings|url=https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|date=February 24, 2009|publisher=European Commission|at=Paragraph 7|access-date=April 22, 2020|archive-date=March 19, 2020|archive-url=https://web.archive.org/web/20200319184730/https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|url-status=live}}</ref>  According to the 'Guidance in Applying Article 102''<nowiki/>''', the Commission normally intervene in possible predatory pricing cases if a dominant firm aims to maintain or strengthen its market power by "sacrificing" short-term losses to foreclose "as efficient" competitors,<ref>{{Cite web|title=Guidance on the Commission's Enforcement Priorities in Applying Article 82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings|url=https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|date=February 24, 2009|publisher=European Commission|at=Paragraph 23|access-date=April 22, 2020|archive-date=March 19, 2020|archive-url=https://web.archive.org/web/20200319184730/https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|url-status=live}}</ref> or even "less efficient" competitors.<ref>{{Cite web|title=Guidance on the Commission's Enforcement Priorities in Applying Article 82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings|url=https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|date=February 24, 2009|publisher=European Commission|at=Paragraph 24|access-date=April 22, 2020|archive-date=March 19, 2020|archive-url=https://web.archive.org/web/20200319184730/https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009XC0224(01)&from=EN|url-status=live}}</ref> The "as efficient competitor" refers to a hypothetical competitor with the same costs as the dominant firm.<ref>{{Cite book|last1=Jones|first1=Alison|title=Jones & Sufrin's EU Competition Law: Text, Cases, and Materials|last2=Sufrin|first2=Brenda|last3=Dunne|first3=Niamh|publisher=Oxford University Press|year=2019|isbn=9780198824657|pages=374}}</ref> The "as efficient competitor" test was endorsed in ''AKZO'' as the legal standard for assessing predatory pricing under Article 102.<ref name="eur-lex.europa.eu"/>

===India===
[[The Competition Act, 2002]] outlaws predatory pricing, treating it as an abuse of dominant position, prohibited under [https://web.archive.org/web/20220401021319/http://www.cci.gov.in/sites/default/files/cci_pdf/competitionact2012.pdf Section 4]. Predatory pricing under the Act means the sale of goods or provision of services, at a price below cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.<ref>{{Cite web|url=http://www.manupatrafast.com/articles/PopOpenArticle.aspx?ID=3e7817b5-23f9-4313-9ac0-fd94a329de45&txtsearch=Subject:%20Competition%20/%20Antitrust|title=Manupatra Articles|website=www.manupatrafast.com|access-date=2016-12-12|archive-date=2016-12-20|archive-url=https://web.archive.org/web/20161220102602/http://www.manupatrafast.com/articles/PopOpenArticle.aspx?ID=3e7817b5-23f9-4313-9ac0-fd94a329de45&txtsearch=Subject%3A%20Competition%20%2F%20Antitrust|url-status=live}}</ref> A contravention of section 4 of the Act is anti-competitive per se, where there is no requirement to prove that the conduct had an anti-competitive effect on the market.<ref>{{Cite journal |last=Agrawal |first=Akanshha |date=2021-03-01 |title=Predatory Pricing and Platform Competition in India |url=https://kluwerlawonline.com/journalarticle/World+Competition/44.1/WOCO2021006 |journal=World Competition |language=en |volume=44 |issue=1 |issn=1011-4548}}</ref>

===Russian Federation===
Article 10 of the Federal Law No.135-FZ 'On the Protection of Competition' (FLPC) ([[Russian language|Russian]]: ''ст. 10, Федерального закона от 26.07.2006 N 135-ФЗ "О защите конкуренции"'') deals with unilateral conduct of economic entities by prohibiting abuse of dominant position. The definition of such abuse, as stated in the article, includes   "the setting of an unjustified high or unjustified low price of a financial service by a financial entity".<ref>{{Cite web|url=http://www.consultant.ru/document/cons_doc_LAW_61763/851f7a5f6d99da11639600f4c686a2949ab23feb/|title=Статья 10. Запрет на злоупотребление хозяйствующим субъектом доминирующим положением / КонсультантПлюс|website=www.consultant.ru|access-date=2018-04-28|archive-date=2018-04-30|archive-url=https://web.archive.org/web/20180430184212/http://www.consultant.ru/document/cons_doc_LAW_61763/851f7a5f6d99da11639600f4c686a2949ab23feb/|url-status=live}}</ref>

All the matters connected with the abuse of the market power are handled by the Federal Antimonopoly Service of Russian Federation (FAS). The FAS investigates all alleged violations of the antimonopoly legislation and determines whether a dominant position has been exploited by one of the market participants.

===United Kingdom===
Section 18(1) of the [[Competition Act 1998]] prohibits the abuse of a dominant position by "one or more undertakings... if it may affect trade within the United Kingdom."<ref>{{Cite web|url=http://www.legislation.gov.uk/ukpga/1998/41/contents|title=Competition Act 1998|website=www.legislation.gov.uk|language=en|access-date=2018-04-28|archive-date=2018-04-30|archive-url=https://web.archive.org/web/20180430182954/http://www.legislation.gov.uk/ukpga/1998/41/contents|url-status=live}}</ref> This is commonly known as the "Chapter II prohibition". The section is very similar to article 102 of the Treaty on the Functioning of the European Union governing the anti-monopoly laws within the EU jurisdiction, with the exception of parts regarding the effect on trade within the UK.

===Germany===
Sections 19 and 20 of the Act against Restraints of Competition (ARC) prohibit the abuse of a dominant position. Section 19 lists in more detail the entities with market power addressed by the Act. Article 102 of the Treaty on the Functioning of the European Union also applies, although it has some differences with the ARC.

Compliance with the Act is enforced by the [[Federal Cartel Office|German Federal Cartel Office]] (FCO) ([[German language|German]]: ''Bundeskartellamt''). With the FCO as the higher federal authority, there also exists state cartels in each of the federal states in Germany. The FCO is in the area of responsibility of the [[Federal Ministry for Economic Affairs and Energy]] ([[German language|German]]: ''Bundesministerium für Wirtschaft und Energie'').

=== Austria===
The European competition law art. 82 EC and § 5 KartG 2005 prohibit a market dominant enterprise, as well as a collective of several dominant enterprises, from intentionally suppressing a competitor or increasing their respective market share by using methods other than those of legal competitive performance.<ref>(OGH 9.10.2000,ÖBI 2001,135 – subscription prices ; OGH 16.12.2002, 16 Ok 11/02 –Red Bull)</ref> According to the law, predatory pricing is considered a violation if a market-dominant enterprise controls the local market by offering its goods and services at prices below AVC. However, if prices are below ATC, but above AVC, predattory pricing may not be considered a law violation. Furthermore, if market abuse is directed against competitors, and not against suppliers and clients, Austrian law provides provisions under  § 1UWG (in connection with §5 para. 1 KartG 2005, if there is a competitive relationship).<ref>OGH 9.9.1997,36 –film hire;OGH 17.3.1998,ÖBI 1998,356.</ref> Additionally, according to §1UWG,  predatory pricing can be unconscionable if intended to harm competitors—even without the dominant company incurring losses. Moreover, predatory pricing can be unconscionable according to §1UWG  if the dominant firm expels enough competitors from the market to gain enough market share to dictate prices.<ref>OGH 10.7.2001 ÖBI 2001,127 best offer</ref>

===Denmark===
According to §6, sec. 1, of the Competition Act (CA), entering into anti-competitive agreements is prohibited.  The CA §6 corresponds to art. 81, sec. 1 of the EC- Treaty and prohibits predatory pricing.<ref>Ejler Bruun at al., Fogedsager (2nd edn 2000), pp 635 et seq., B, von Eyben et al., ''[[Karnovs Lovsamling]]'' (2001) p. 3944</ref>

===Greece===
Generally, Art. 1(1) of the antitrust law (I. 703/1977) prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that strive to prevent, restrict, or distort competition in the Greek market.<ref>Art 1(1) of I. 703/1977</ref> Particularly art. 2(1) of I 703/77 prohibits predatory pricing within Greece.

===Sweden===
Under Art. 101 TFEU and Section 6 of the Swedish Competition Act (KL), agreements between undertakings with objectives to effect prevention, distortion or restriction of competition are strictly prohibited in Sweden. Price-fixing agreements (where competitors concur to set prices at an agreed level) between competitors are considered "hardcore" restriction of competition and are prohibited. This does not include other types of price agreements between competitors. These agreements may, therefore, be assessed under rule of reason and can be found permissible if no significant anti-competitive effects are identified.<ref>Swedish Competition Authority. (n.d.). Prohibited agreements. Retrieved from https://www.konkurrensverket.se/en/law--guidance/prohibited-agreements/</ref>