Define: Below Cost

“Below cost” refers to a pricing strategy where a product or service is sold at a price lower than its production or acquisition cost.

In most jurisdictions, selling products below cost is legal unless it is done with the intention of eliminating competition or creating a monopoly, which may violate antitrust laws.

Yes, selling below cost can be considered predatory pricing if it is done with the intent to drive competitors out of the market and subsequently raise prices once competition is eliminated. Predatory pricing is generally illegal.

Antitrust laws, such as the Sherman Act in the United States, regulate selling below cost to prevent anti-competitive behavior. These laws aim to protect fair competition and prevent monopolistic practices.

Selling below cost can be considered an unfair trade practice if it is done with the intent to harm competitors or manipulate the market. However, the specific definition of unfair trade practices may vary depending on the jurisdiction.

Some jurisdictions may allow selling below cost in certain circumstances, such as during clearance sales, promotional offers, or to clear out perishable goods. However, these exceptions are usually subject to specific regulations.

No, selling below cost is not considered price discrimination. Price discrimination refers to charging different prices to different customers based on factors such as location, quantity, or customer type.

Yes, selling below cost with the intent to eliminate competition or engage in predatory pricing can lead to legal consequences. Violations of antitrust laws can result in fines, penalties, and even criminal charges in some cases.

Consulting with a legal professional who specializes in antitrust or competition law is the best way to determine the legality of selling below cost in your specific jurisdiction.

If you suspect a competitor is engaging in illegal below-cost pricing, you may consider reporting the matter to the appropriate regulatory authorities or seeking legal advice to understand your options for addressing the situation.