Companies using their market monopoly position to restrict the development of new entrants by raising prices are a typical **exclusive conduct** (exclusive conduct), which may involve the risk of violations of anti-monopoly laws. The following are common strategies and the logic behind them, but it should be noted that these behaviors may face legal sanctions in most jurisdictions.： --- ### **1. Predatory Pricing (Predatory Pricing)** -**Strategy**: Monopolies reduce prices below costs (or even lose money) in the short term, forcing new entrants to withdraw from the market because they are unable to make a profit, and then raise prices. -**Effect**: New entrants cannot bear long-term losses due to limited funds, while monopolies can support short-term losses by relying on existing profits or market share. -**Risk**: It may violate anti-monopoly laws (such as the U.S. "Sherman Act" and the European Union "Competition Law“), and it is necessary to prove that the enterprise has the ability to ”recoupment" (recover losses afterwards). --- ### **2. Price Squeeze (Price Squeeze)** -**Applicable scenarios**: Monopolies control both upstream key resources (such as raw materials) and downstream markets. -**Strategy**: Raise upstream supply prices, while lowering downstream product prices, and compress the profit margins of new entrants. -**Case **: When telecom operators monopolize broadband networks, they charge competitors high access fees while providing services to consumers at low prices. --- ### **3. Exclusive Contracts (Exclusive Contracts)** -**Strategy**: Sign exclusive agreements with suppliers or customers to restrict them from cooperating with new entrants. -For example: suppliers are required not to supply to competitors, or to provide discounts to customers in exchange for exclusive procurement commitments. -**Effect**: It is difficult for new entrants to obtain the necessary supply chain or sales channels. --- ### **4. Bundled sales (Tying and Bundling)** -**Strategy**: Bundle monopoly products with other products to force customers to give up buying alternatives for new entrants. -For example: Microsoft was sued for bundling the Internet Explorer browser with the Windows system. --- ### **5. Raise industry barriers** -**Strategy**: Increase the compliance costs of new entrants by lobbying the government to set high access standards (such as environmental protection and safety regulations), or control key patents/technologies. -**Concealment**: It is legal on the surface, but it actually uses its monopoly position to solidify the market structure. --- ### **6. Information and Psychological deterrence** -**Strategy**: Publicly declare that there will be a “price war” or “capacity expansion” to deter potential competitors from entering. -For example: monopoly companies vent that they will build new factories to drive down prices, even if they are not implemented, it may affect investor confidence. --- ###**Legal and ethical risks** -**Anti-monopoly supervision**: Most countries prohibit abuse of market dominance (such as Article 17 of China's Anti-monopoly Law and Article 102 of the European Union's TFEU). -**Penalty consequences**: High fines (10% of global turnover), spin-off of businesses, executive accountability, etc. -**Long-term cost**: Damage to corporate reputation, trigger consumer boycotts or stricter government scrutiny. --- ###**Coping strategies for new entrants** 1. **Differentiated competition**: Avoid price wars and focus on market segments not covered by monopolies. 2. **Legal proceedings**: Collect evidence to report monopoly behavior. 3. **Policy lobbying**: Promote regulatory agencies to investigate monopolists or seek industry subsidies. --- ### Summary Although monopolies can squeeze out competitors through price means, these behaviors usually wander on the edge of the law. In the long run, innovation and efficiency competition are sustainable market strategies. Enterprises should design competitive means within the framework of compliance to avoid triggering legal risks due to short-term interests.