Cross-Subsidization
/ˈkrɒsˌsʌbsɪdaɪˈzeɪʃən/
Definitions
- (n.) The practice whereby profits from one product, service, or group subsidize losses or lower prices of another to achieve a competitive or regulatory objective.
The utility company engaged in cross-subsidization by using revenues from urban customers to support rural service expansion.
Forms
- cross-subsidization
- cross-subsidizations
Related terms
See also
Commentary
Cross-subsidization often raises regulatory scrutiny, especially in utility and telecom sectors, as it can mask economic inefficiencies or facilitate anti-competitive behavior.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.