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Froogle pulling a Redmond?

Squeezing the competition with predatory pricing

     
8:43 pm on Dec 8, 2003 (gmt 0)

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Existing shopping engines depend on merchant (advertising) revenue to fund operations and innovation, with froogle muscling in with free feeds to the merchant, do they run into anti-trust provisions?

The Supreme Court has established three criteria for proving an instance of predatory pricing: (1) Prices must be below an appropriate measure of cost, (2) these artificially low prices must be capable of driving rivals from the market, and (3) the perpetrator must have a reasonable prospect of using its monopoly power to recoup its short-term losses.

Sounds like a case.

9:29 pm on Dec 9, 2003 (gmt 0)

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Google isn't a monopoly. They're offering free services, and people are perfectly able to use another service, free or not.
9:34 pm on Dec 9, 2003 (gmt 0)

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As long as it stays free, its okay, just can't use dominant market position to muscle out competitors with predatory pricing.

A violation would occur if the free option disappeared after the competition was damaged.

 

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