Predatory Pricing Claims Could Not Be Supported in the Army Camouflage Monopoly Suit

In GMA Cover Corp. v. Saab Barracuda LLC, U.S. District Court for the Eastern District of Michigan Judge Mark A. Goldsmith adopted U.S. Magistrate Judge Paul J. Komives’ report, tossing a suit that accused Saab Barracuda LLC of manipulating prices of camouflage nets it sold the U.S. Army.  In its suit, Saab’s rival, GMA Cover Corp., accused Saab of trying to monopolize the market for the camouflage system – for which the only buyer was the federal government – by slashing its prices and forcing GMA out of business after the government accepted GMA’s bid for these systems.  The court held that “[i]n a case such as this, where the buyer is the ultimate consumer, the monopoly supplier will not be able to extract a supracompetitive price to recoup its investment in the below-cost pricing,” because a consumer like the government has substantial bargaining power and could refuse to accept any offer.

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