The airline and e-commerce industries have notable and important parallels, particularly when viewed the antitrust context. Both industries are controlled by large, powerful companies operating across several markets guarded by substantial barriers to entry, which presents the opportunity for such companies to use predatory pricing to threaten-or extinguish-new and existing competition. Predatory pricing, which is prohibited by the Robinson-Patman Act and § 2 of the Sherman Act, can take different forms, but it has been defined generally as pricing goods or sendces below a relevant measure of cost with the dangerous probability of recouping foregone profits in the primary market. This definition of the offense and the Brooke Group test derived from it have allowed companies to avoid antitrust scrutiny despite their use of predatory pricing tactics as an anticompetitive tool. Specifically, the Brooke Group analysis fails to properly identify cases of predatory pricing because it avoids chilling competition at the expense of allowing actual anticompetitive conduct to continue unrestrained. Since 1993, when the seminal case Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. was decided, predatory pricing cases have been doomed from the moment the suits are filed: a vast majority of the cases are dismissed on summary judgment, and the cases that do survive motions for summary judgment are uniformly decided in favor of the defendant. The Brooke Group test largely is not equipped to detect the very conduct it was created to address. As demonstrated by the test's application in the airline and e-commerce industries, the below-cost requirement should be adjusted to allow for incremental-cost analysis where appropriate. Additionally, the recoupment prong of the test should be altered to allow plaintiffs to show that companies that incur losses in the primary market are recouping them in different markets or product lines. This change should properly balance the competing concerns of chilling legitimate, pro-competitive business practices and protecting the competitive process.
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