![]() ![]() If Sussman is right, Amazon’s suppliers could use his theories to sue the company and gather evidence in discovery that could reveal illegal maneuvering. This strategy is even more attractive because corporate accounting rules make the conduct virtually undetectable. And Amazon’s doing it, Sussman claims, without raising prices for customers. In a paper for the Journal of Antitrust Enforcement published in February that has generated discussion in academic circles, Sussman points to evidence that Amazon has already flipped the switch, moving from dominating the market by undercutting rivals to reaping the profits from that dominance. Since then, predatory pricing cases have been few and far between.īut Shaoul Sussman, a law student at Fordham University, thinks he’s come up with a roadmap to prove that Amazon profitably engages in predatory pricing, overcoming Bork’s skepticism. This would “require the conspirators to sustain substantial losses in order to recover uncertain gains,” the Court ruled. The Supreme Court adopted Bork’s theory in a 1986 case, claiming that it would be “implausible” for Japanese electronics makers to conspire to hold prices low for television sets exported to the U.S. The high bar is thanks to Robert Bork, the godfather of modern antitrust theory, who declared predatory pricing schemes irrational in his influential book The Antitrust Paradox. In addition, plaintiffs would have to establish that Amazon’s practices had a high likelihood of successfully creating a lucrative monopoly. Plaintiffs bringing suit would have to demonstrate that Amazon set prices below the cost of production, which is difficult without access to the internal books. But predatory pricing is extremely difficult to prove in court. You can’t drop prices with the intent to monopolize. The technical term for this is predatory pricing, and it’s actually illegal under U.S. Amazon is laying in wait, in other words, to become a monopoly. Many critics have offered a more sinister theory: Amazon has spent the past couple decades building up market share by underpricing competitors, and someday, when there are no alternatives left, it will become fabulously profitable. ![]()
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