Raising Rivals’ Costs, Pizza Edition

Josh Wright —  7 November 2011

Many antitrust law professors are fond of using arson — e.g., a firm burning down the rival’s factory — as the paradigmatic example of exclusionary conduct that might raise rivals’ costs without plausible efficiency justifications.  Here is a modern example with law school hypothetical written all over it involving a Domino’s Pizza manager burning down a competing Papa John’s franchise:

Two managers of a Domino’s Pizza restaurant in Florida were facing arson charges Saturday after allegedly burning down a competing Papa John’s franchise in an attempt to increase sales, the Ocala Star-Banner reported.

The Oct. 20 fire at the Papa John’s in Lake City, Fla. — about 60 miles west of Jacksonville — was ruled to be a case of arson shortly after it was set alight. The blaze completely gutted the business, Lake City Police Department spokesman Capt. John Blanchard.

An investigation resulted in the arrest of 23-year-old Sean Everett Davidson on Thursday and 22-year-old Bryan David Sullivan on Friday. Both were charged with arson. Both men confessed to the crime and were booked into county jail.

Sullivan said he set the fire so the Papa John’s location would go out of business and sales at his Domino’s location would increase, according to police.

HT: a loyal TOTM reader.

 

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