Question: Why does a plaintiff alleging predatory bidding have to prove that the defendants bidding on the buy side caused the cost of the relevant output
Why does a plaintiff alleging predatory bidding have to prove that the defendant’s “bidding on the buy side caused the cost of the relevant output to rise above the revenues generated in the sale of those outputs”?
Weyerhaeuser Company entered the Pacific Northwest’s hardwood lumber market in 1980. By 2000, Weyerhaeuser owned six mills processing 65 percent of the red alder logs in the region. Meanwhile, Ross-Simmons Hardwood Lumber Company operated a single competing mill. When the prices of the logs rose and those for the lumber fell, Ross-Simmons suffered heavy losses. Several million dollars in debt, the mill closed in 2001. Ross-Simmons filed a suit in a federal district court against Weyerhaeuser, alleging attempted monopolization under Section 2 of the Sherman Act. Ross-Simmons claimed that Weyerhaeuser used its dominant position in the market to bid up the prices of logs and prevent its competitors from being profitable.
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