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To play devil's advocate, there are plenty of businesses where companies sell loss-leaders in order to bring in customers, who then spend lucrative amounts of m
by whack 10y ago
To play devil's advocate, there are plenty of businesses where companies sell loss-leaders in order to bring in customers, who then spend lucrative amounts of money on other things. Black Friday deals are one example. Mexican restaurants offering free salsa and chips is another.
On a larger scheme though, I agree that companies selling things at below-cost, can lead to anti-competitive outcomes that bankrupt any competitors without deep pockets. Uber's subsidized rides are an example of this. The WTO has rules against this when it comes to international trade. Perhaps it's time we adopted similar laws domestically as well.
- pharrlax 10y agoSure, but Mexican restaurants' salsa and chips isn't a separate industry. Offering free chips with dinner isn't an attempt to price people out of buying Tostitos at the grocery store. It's one thing when you offer a subset of services within the same industry as a loss leader; it's another when you extend your reach to another industry and start pricing out existing companies to gain a foothold there.