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Predatory pricing1/16/2024 However, there are practices that can sometimes be a misuse of market power. The law doesn’t label specific practices as a misuse of market power. Substantial market power to do anything with the purpose, effect or likely effect ofīusinesses with substantial market power must not do something which stops other businesses from competing on their merits. Practices that may be misuse of market power Learn more about the difference between competitive and anti-competitive conduct. drive down its prices with efficiency improvements.Ĭompetitive practices that improve efficiency, innovation, product quality or price competitiveness are unlikely to be a misuse of market power. use its skills and resources to develop a better product or service.attract customers through promotional campaigns.Learn more about what is and isn’t allowed when setting prices.Ī business with substantial market power is also allowed to out-compete other businesses. While charging high prices may seem unfair, it's not illegal. It's not illegal for a business to have or use market power.įor example, a business with market power may raise its prices above competitive levels. The business has substantial market power in the supply of cement in the regional town. With no other commercially viable suppliers of cement in the town, the business can raise its prices above competitive levels. The next closest cement works is far away, so it’s expensive to have cement brought into town from elsewhere. Example of a business with substantial market powerĪ business owns the only cement works in a regional town.
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