Laws on Predatory Pricing & it’s Impact on Small Businesses:

Small businesses are the driving forces of the economy as they provide a lot of employment opportunities to people who cannot be absorbed by large corporations. They also contribute to economy by bringing growth and innovation to the community in which the business is involved in. Hence, these businesses must be protected. The Competition Act, 2002 was passed for this purpose. Predatory pricing is a pricing strategy followed by dominant firms which sell goods and provide services at a level lower than the cost of the goods and services with intent to erase all the competition in the market. This is a prohibited practice under the Competition Act, 2002. Section 4(2) defines predatory pricing as “the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.