Is unfair competition successful in the long run?
Whether the described worst-case really makes its appearance depends primarily with the market development, the purchasing behavior of customers and the market flexibility together. The following principles apply in this regard:
- The lower the market entry thresholds for smaller, non-monopoly providers, the lower the effects of dumping.
- A developed and flexible market is less likely to be affected by unfair competition than a rigid market.
- The more convinced the customers are of the quality of a product and the more firmly the customers are bound to a company, the lower the chance that they will jump at cheap dumping prices from competing companies.
Types of dumping
In addition to the price dumping of products and goods in the regional economy, so-called “state dumping” , wage dumping, social dumping and environmental dumping can also be observed.
| Type of dumping | Explanation |
| Wage dumping | Wage dumping is a typical form of exploitation of workers . The wage and salary payments are well below the average. Many workers affected by wage dumping are affected by poverty despite having a permanent job. |
| Environmental dumping / agricultural dumping | The term environmental dumping describes the production and sale of agricultural products in other countries at an extremely low price. This can happen due to a lack of environmental regulations. |
| Social dumping | Under social dumping that is lowering the cost of production at the expense of workers understood. A lack of social security measures, such as accident protection or health insurance, lead to social dumping. |
| International or state dumping | Tax dumping always comes from the government. This significantly lowers the tax rates for special companies in order to give these companies a competitive advantage. |
| Tax dumping | Tax dumping always comes from the government. This significantly lowers the tax rates for special companies in order to give these companies a competitive advantage. |
Dumping in the export sector
Not only foreign companies carry out price dumping in Germany, German companies also try from time to time to stimulate their sales with dumping prices. This is particularly often the case when the goods that have already been exported do not sell well and become slow-moving. A re- import is usually quite expensive, as are the storage costs.
Tip!
Note that the term dumping prices refer to the normal production costs and sales prices in the country of origin . The sales prices can therefore have normal value in the target country.
Legal action against dumping
According to polyhobbies, dumping is prohibited across borders. In the European Union, both the basic anti-subsidy regulation VO (EU) 2016/1037 and the basic anti-dumping regulation VO (EU) 2016/1036 apply.
Furthermore, the provisions of the Act against Unfair Competition (UWG for short) apply, which is based on the unfair behavior of certain entrepreneurs towards other companies.
What does the dumping law say?
Which measures are taken against the dumping of goods depends on the individual case. Accordingly, the competent authorities must work closely together in order to be able to implement the details and applicable customs duties quickly.
Conclusion
Dumping is the sale of goods and services at a price that is below the cost of production . With this measure, companies pursue the goal of faster market entry , weakening of competing companies , addressing a specific target group or the quick sale of their goods . A distinction is made on the basis of the period of time within which a dumping attempt takes place. Various laws apply in the EU to avoid dumping in imports and exports.
Frequently asked Questions
What is dumping?
Dumping is the deliberate low price of goods and services . The sales prices are below the production costs for a certain period of time. A profit is no longer possible.
What is dumping economy?
Under dumping in the economy conscious offering of goods and services of foreign companies is understood in the European market under price. This weakens domestic companies in their market position.
What is social dumping?
In the case of social dumping , important social benefits within a company are greatly reduced or completely eliminated. The result is a reduction in production costs.
What is meant by dumping syndrome?
In contrast to the other types of dumping, the dumping syndrome is not an economic problem, but a health problem.
It occurs particularly frequently after gastric operations and can only be remedied with medication or further operations. Dumping syndrome is a pathological emptying of the stomach. It empties just a few minutes and no later than three hours after the meal. Side effects such as diarrhea, vomiting and an insufficient supply of the body with important minerals can occur. If this condition is not treated, it can lead to decreased consciousness and fainting.
In the case of a sleeve stomach, dumping is an accelerated emptying of the stomach, which occurs mainly after operations. The emptying of the stomach takes on pathological proportions and can lead to severe discomfort and corresponding symptoms.
