Thursday, November 13, 2003

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How to destroy the competition


By Patrick J. Wood
News-Chronicle

Every now and then a company attempts to create a monopoly by putting other, less-funded companies out of business. How do they do that? They take their dominant product and underprice it knowing that other markets they are in can subsidize those slimmer margins until the competition goes under.

Another good trick is to get merchants to sign a bigger contract for their dominant product and offer them other products for free, or close to free ... products they can afford to give away because they know the competition is then forced not to charge for theirs.

After the competition goes away, they can and do raise prices at will to recoup all of their "investment costs."

Companies that engage in these practices should be sought out by our justice system at the state and national levels. They should be caught and taken apart. Their executives and key managers making more than six figures and benefitting from this type of behavior at the expense of others should be put into prison.

If this is initiated as it has been in the past with AT&T and Microsoft, the business world would be a better, more diversified and ethical place.


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