Why Does A Low Moving Price Become An Antitrust Issue?
Gregory Feit, a partner at Reavis Page Jump LLP, told Patch that lowering prices to attract customers, rather than to drive out competitors, cannot by itself form the basis of a predatory-pricing claim.
Instead, Dumbo would need to show that Piece of Cake’s prices were below its average variable costs and Piece of Cake had a reasonable chance of recovering the losses from those below-cost prices, he said.
“In other words, if Piece of Cake’s prices are above its average variable cost, its pricing will presumptively be held lawful,” Feit said.
The legal concern arises when below-cost pricing becomes part of a strategy to eliminate competition and then gives the company enough market power to raise prices and recover the losses it incurred.
Dumbo alleges that Piece of Cake already holds more than 50 percent of the relevant market and that several longtime competitors, including Wayne Moving and Flat Rate Movers, have left the market.