What types of practices are prohibited by California’s unfair practices act?
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The Unfair Practices Act forbids four specific pricing practices:
- Sales below cost — sales of a product or service below the seller’s cost (including overhead) undertaken with the purpose of injuring competitors or destroying competition;
- Loss leaders — sales of a product or service below the seller’s cost (including overhead) under certain circumstances (for example, to induce sales of a different product or service) undertaken with the purpose of injuring competitors or destroying competition;
- Locality discrimination — charging different prices for the same product or service in different locations, with the intent to injure competitors or destroy competition; and
- Secret rebates — secret payments of rebates or commissions to one customer but not another, where such payments injure a competitor and tend to destroy competition.