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- Title
Wal-Mart and the divergence of state and federal predatory pricing law.
- Authors
Hawker, Norman W.; Petty, Ross D.
- Abstract
The article focuses on the case of American Drugs Inc. versus Wal-Mart Stores Inc., which was related to predatory pricing. In 1987, Wal-Mart began selling prescription drugs from its store in Faulkner County, Arkansas. Four years later three independent drugstores (collectively referred to as American Drugs) filed a lawsuit against Wal-Mart, alleging that its Faulkner County store had set prices of certain products below the prices charged by Wal-Mart at other locations in Arkansas and even below Wal-Mart's costs for the items in question. The chancery court agreed with American Drugs that Wal-Mart had indeed set its prices below its costs for a variety of items. The Arkansas Unfair Practices Act required that Wal-Mart have the intent or purpose of harming competition. Wal-Mart appealed, and a closely divided Arkansas Supreme Court rejected the inference of predatory intent. In the case, the Arkansas Supreme Court noted that Wal-Mart had engaged in below-cost sales and mere proof of below-cost sales is not sufficient to prove a violation of the Act.
- Subjects
FAULKNER County (Ark.); ARKANSAS; PREDATORY pricing; WAL-Mart Stores Inc.; PRICE regulation; UNFAIR competition; ACTIONS &; defenses (Law)
- Publication
Journal of Public Policy & Marketing, 1996, Vol 15, Issue 1, p141
- ISSN
0743-9156
- Publication type
Article