Question

You have been hired as an expert witness in a federal antitrust case. You are planning your strategy for determining whether or not your client (the defendant in the case) has engaged in predatory pricing. How will you get started? In general what is your strategy? What must you do to successfully defend your client?

Answer 1

First and foremost, predatory pricing, being a practice of setting prices too low as to undermine market, is a violation of antitrust laws but it is very difficult to actually prove that prices are predatory, so the only burden of proof that my client has is to prove that the low prices are a part of successful market competition.

The overall strategy revolves around procing that the prices are not very low and also that my client had no intent to create market monopoly. An easier way to prove that is to show that the prices charged are not below seller's cost. Anti trust claims have a very high bar in terms of requirements for a price to be qualified as a predatory price. For a price to be predatory, the pricing practices must affect market competition as a whole and not just rival companies. Showing the financial statements of client in court with the operating cost less than the revenue, the case would swing in favor of defendant. Further, a good argument that the competitors are charging way more than the operating costs would give an extra edge to the defendant.