Why isn't selling at a loss illegal?

[Erik_Twice]

Because it is unfair competition and pretty much the definition of it. You can't sell apples for less than they are worth to drive your competitors to the ground.

[noiseredux]

You can't sell apples for less than they are worth to drive your competitors to the ground.

says who?

[ZeroAX]

says who?

It is a law in many countries.

[noiseredux]

says who?

It is a law in many countries.

what? You're joking, right?

[Krooner]

There something about it in european law, cornering markets and such. but not strictly pricing. Goods mostly come with a recommended retail price, but that's all it is a recommendation.

No one is selling at a loss. No matter how cheap it looks.

[Opa Opa]

Because it is unfair competition and pretty much the definition of it. You can't sell apples for less than they are worth to drive your competitors to the ground.

...Never mind.

[prfsnl_gmr]

Selling at a loss is not illegal. Businesses do it all the time. It is illegal in many counteries to engage in "anti-competitive" behavior (such as price-fixing, etc.), the purpose of which is to give a business monopoly power. Accordingly, while selling at a loss is not per se illegal, it is illegal if the intent is to drive your competitors out of the marketplace (rather than recouping losses).

For example, if a business buys one million widgets for $1.00 each and, to clear its inventory, later sells those widgets for $0.50 each, it has not engaged in any illegal activity. If, on the other hand, a business buys a million widgets for $1.00 each and, for the express purpose of destroying its competition in the retail widget industry (so that it can later use its monopoly power to raise the consumer price of widgets to $3.00), sells the widgets for $0.50 each, it is probably engaging in illegal "anti-competitive" behavior. Since a competitor may be harmed by the legitimate clearing of the business's inventory (i.e., the first example), it can be difficult to distinguish between when a business is selling at a loss for legitimate purpose and when it is engaging in illegal "anti-competitive" behavior. Like many things in the law, intent is the key.

[Bikeage]

I'm no economist, but I believe it's perfectly legal to do so in a free market economy. If Wal-Mart decides to sell apples at a loss for half of what a local Mom & Pop grocer sells them for just to bring more shoppers into their store to hopefully purchase other goods that M&P don't have, then yeah, thats unfair to M&P.... but whoever said life is fair?

It should not be up to the government or legislature to legally enforce the price of those apples, rather the burden is now upon M&P to creatively evolve thier business to be competitive.... hopefully they can succeed, if not, well, thats called survival of the fittest, a natural law enforced long before humans started coming up with our own silly rules.

[AppleQueso]

I'm no economist, but I believe it's perfectly legal to do so in a free market economy. If Wal-Mart decides to sell apples at a loss for half of what a local Mom & Pop grocer sells them for just to bring more shoppers into their store to hopefully purchase other goods that M&P don't have, then yeah, thats unfair to M&P.... but whoever said life is fair?

It should not be up to the government or legislature to legally enforce the price of those apples, rather the burden is now upon M&P to creatively evolve thier business to be competitive.... hopefully they can succeed, if not, well, thats called survival of the fittest, a natural law enforced long before humans started coming up with our own silly rules.

after all, anti-competition tactics and monopolies are good for us all, right?

[yomomma1]

Didn't sony sell the PS3 at a loss for a while there?