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One of the reasons it is against the anti-trust laws to do this is because it places large businesses like Wal-mart and Microsoft at an unfair advantage because they have enough capital to get through lean times caused by below cost pricing long enough to drive the small business competitors out of business.
Many states have laws against selling gasoline below a legal limit that is set by the government for that purpose.
Several years ago when the price of gas was on the rise companies began realizing that if they offered gas at a reduced rate it would lure consumers into their business and allow them to purchase other goods.
One example was suit filed against Kroger in which the store was accused of violating antitrust laws when it priced its gas below cost.
The store argued that it was not doing so to drive other gas stations out of business but to entice consumers to stop for gasoline and then come into the store and purchase groceries.
Because of the impact the reduced gasoline prices was having on surrounding suppliers of gasoline the stores were ordered to raise their per gallon price to meet or exceed the minimum standards set by law.
Kroger's defense was that it was one of the only ways it could be competitive among the many discount grocery stores in the area.
New York recently went through an anti-trust issue with gasoline sales by ordering a reduction in competitive stations opening in areas where there was already a saturation of stations (Proposed New York Gasoline Legislation Could Harm Consumers, Says FTC Staff (http://www.ftc.gov/opa/2002/08/nygas.htm).
Consumers argued against this mandate as they felt the additional stations would bring healthy competition and drive the prices down that the consumer would pay.
The federal antitrust laws deal specifically with below-cost pricing that has a dangerous probability of leading to monopoly. The FTC, the Department...
It will help to provide a place for the customers who want specialized products or services and are willing to pay a little extra to have it.
Another thing that small businesses can do is combine their efforts to provide a wider variety or product and service to the consumer.
Finally, the most important and effective weapon the small business has against the giants is personalized, superior customer service.
References
Antitrust below cost pricing http://en.wikipedia.org/wiki/Predatory_pricing
Proposed New York Gasoline Legislation Could Harm Consumers, Says FTC Staff
http://www.ftc.gov/opa/2002/08/nygas.htm
AG takes aim at below-cost pricing statute: Issue was highlighted in a recent federal court decision against Kroger Co. For offering customers discount on gas for buying groceries.
In essence this model of knowledge sharing creates an egalitarian benefits model where each side of the information transaction benefits. Conclusion Anti-globalization advocates argue that this approach to creating business value chains and relationships reduces economic growth to transactions where the 3rd world nations often receive little if any value for their efforts. Exacerbating this is the fact that transactions are king, relationships are not valued and trust suffers. What needs
Instead they are being left in family homes, alone while family members work to pay the bills. One of the problems with government regulations and business is that often times the regulation applies across the board with little regard to the size of the business or the size of the population that the business serves. To implement a regulation to businesses across an entire geographic area can harm the business in
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