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    Categories>Career & Business>What is Predatory Pricing? Driving Competitors Out of the Market

    What is Predatory Pricing? Driving Competitors Out of the Market

    19 min
    |
    |
    Apr 26, 2026
    BusinessEconomicsSociety

    Learn how predatory pricing works when companies set prices below cost to drive out competitors and gain monopoly power. Explore this anti-competitive practice.

    What is Predatory Pricing? Driving Competitors Out of the Market

    Best quote from What is Predatory Pricing? Driving Competitors Out of the Market

    “

    Predatory pricing is like a Trojan horse for your household budget. It creates a temporary buyer’s market where you enjoy lower prices, but once the competition is dead and buried, that same company can raise prices with total impunity because they’ve successfully built a monopoly.

    ”

    This audio lesson was created by a BeFreed community member

    Input question

    Question: 1 ( QId: 2039305) Review End (Tutored, Untimed) When a company deliberately sets prices lower than costs to drive competitors out of the

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    Learning style
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    Knowledge sources
    Predatory Pricing: Definition, Example, and Why It's Used (2026)
    link
    https://investguiding.com/article/predatory-pricing-definition-example-and-why-it-s-used
    antitrust laws | Wex | US Law | LII / Legal Information Institute
    link
    https://www.law.cornell.edu/index.php/wex/antitrust_laws
    Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. - Wikipedia
    link
    https://en.wikipedia.org/wiki/Brooke_Group_Ltd._v._Brown_%26_Williamson_Tobacco_Corp.
    BROOKE GROUP LTD., Petitioner v. BROWN & WILLIAMSON TOBACCO CORPORATION. | Supreme Court | US Law | LII / Legal Information Institute
    link
    https://www.law.cornell.edu/supremecourt/text/509/209

    Frequently Asked Questions

    Predatory pricing is a business strategy where a company deliberately sets its prices lower than its actual costs. The primary goal of this anti-competitive practice is to drive existing competitors out of the market and discourage new entrants from competing. By sustaining temporary losses, the company aims to eliminate competition and eventually establish a dominant market position or monopoly power.

    Pricing below cost disrupts healthy market competition by creating an unsustainable environment for smaller or less financially stable rivals. While consumers may see lower prices in the short term, the long-term effect is often a reduction in choice and innovation. Once competitors are driven out, the dominant firm can raise prices without the threat of competition, harming the overall market structure.

    Predatory pricing is considered anti-competitive because it focuses on winning market share through financial endurance rather than superior products or efficiency. This strategy seeks to gain monopoly power by intentionally forcing rivals into bankruptcy or market exit. Because it undermines the competitive process and can lead to higher prices later, it is often subject to legal scrutiny under antitrust laws.

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    "Reading used to feel like a chore. Now it’s just part of my lifestyle."

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    "Feels effortless compared to reading. I’ve finished 6 books this month already."

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    Key Takeaways

    1

    The Price Tag That Should Make You Shudder

    0:00
    0:52
    1:34
    2

    The Predator’s Playbook and the Art of the Loss Leader

    2:28
    3:17
    4:14
    3

    Legal Chess and the High Bar of Proof

    5:18
    6:08
    6:59
    4

    The Smoke and Mirrors of the Cigarette Wars

    7:48
    8:36
    9:22
    5

    Global Ambitions and the Art of "Dumping"

    10:26
    11:04
    12:02
    6

    The Hidden Cost of the "Great Bargain"

    12:59
    13:33
    14:22
    7

    A Practical Playbook for Navigating the Market

    15:04
    15:54
    16:49
    8

    Looking Beyond the Bottom Line

    17:34
    18:18
    19:04

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