Prislegging

Prislegging is a term that describes the act of intentionally underpricing goods or services to gain an unfair competitive advantage. This practice is often employed by new entrants to a market or by established companies looking to drive out rivals. The core strategy involves setting prices below the cost of production or the prevailing market rate, with the expectation that this will attract a large customer base and make it difficult for competitors to sustain their operations.

The term "prislegging" combines "price" with "legging," suggesting a deliberate action to "leg" or impede competitors through pricing tactics. While low prices can be a legitimate competitive strategy, prislegging specifically refers to instances where the pricing is seen as predatory or unsustainable, often with the intent of monopolizing the market once competitors have been eliminated.

This practice can have several consequences for the market. Initially, consumers may benefit from lower prices. However, in the long term, if prislegging is successful in eliminating competition, the remaining company may be able to raise prices significantly without facing competition, potentially harming consumers more than the initial low prices helped. Regulatory bodies in many jurisdictions monitor for anti-competitive practices, including predatory pricing, to ensure fair market competition and protect consumer interests. The legality of such pricing strategies often depends on specific market conditions, the intent of the company, and the demonstrable harm to competition.