By Titus O. Kusumajati

Predatory pricing is like a cunning wolf in the world of business. It's a strategy where a large and dominant company temporarily slashes its prices to a level that smaller competitors simply can't match. This tactic might seem like a sweet deal for consumers at first, as they enjoy lower prices, but in reality, it's a calculated move to wipe out the competition.

 

Imagine you run a cozy local bakery, and suddenly a big supermarket chain opens up next door. This retail giant, with its vast resources, decides to sell bread at a price so low that your little bakery can't possibly keep up. You start losing customers and revenue, and your business struggles to survive. This is predatory pricing in action.

 

The goal of this predatory wolf in business clothing is to drive the competition out of the market. Once the smaller competitors are forced to close their doors, the predator raises its prices again. With fewer choices, consumers are left with no option but to pay higher prices for the same goods or services.

 

Predatory pricing isn't just about survival of the fittest. It's illegal in many countries because it harms healthy competition and, ultimately, consumers. Antitrust laws exist to protect against such practices. These laws are like the shepherd who keeps the wolf at bay, ensuring a level playing field for businesses of all sizes.

 

In essence, predatory pricing is a dangerous game where the big fish tries to swallow the small fish. It might offer short-term savings, but in the long run, it can lead to less choice, higher prices, and a less vibrant marketplace. So, next time you spot prices that seem too good to be true, be cautious. There might be a predator lurking in the shadows, ready to pounce on its unsuspecting prey. (TOK19102023).