Dropping prices below cost to wipe out competitors is predatory pricing which is prohibited under the antitrust laws. It's not always easy to prosecute, but it against the law nevertheless.
What does that mean when it comes to software though? For something like Uber or Instacart that seems pretty straightforward, but for most tech companies I'm not sure how to determine what is predatory. Otherwise aren't all unprofitable companies selling below cost?
Yes, it's a bit of a problem for the field! Like many aspects of antitrust, predatory pricing applies cleanly for an industrial-era economy but as you point out, it's less clear how to translate it into the context of 21st century informational capitalism. A significant amount of legal and economic research in the field is asking these kinds of questions, and the answers are still forthcoming.
tqi|2 years ago
todd-davies|2 years ago
whimsicalism|2 years ago