BMAL 560 Critical Analysis Template.doc - BMAL 560 Name Toya D Butler Class BMAL 560 Section B01 Fall 2017 Critical Analysis Topic Consumer Protection

BMAL 560 Critical Analysis Template.doc - BMAL 560 Name...

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BMAL 560Name: Toya D. ButlerClass: BMAL 560Section: B01 Fall 2017Critical Analysis Topic: Consumer Protection and its Impact on the Finance IndustryPRINCIPLE:Defined as laws that promote competition and prevent trusts, monopolies, or other business combinations that restrain trade (Graham, Baxter, & Davis, 2003)Designed to strengthen and maintain fair competition in the economyLegislation to control monopolies and restrictive practices in favor of competitionPrevents monopoly, prohibits anti-competitive behavior, and unfair and deceptive business practicesFosters competition and protects consumers (Lawrence, Weber, & Post, 2005, p.188)PRACTICE:Antitrust or competition law is a generally accepted practice in the U.S. and other developed nationsOpinions vary on the effectiveness of antitrust laws due to vagueness in legislationAntitrust has become a standard of business operations throughout the worldDerived from U.S. law originally structured to combat business trusts, commonly known as cartelsViewed as an alternative to regulationPARTICULARS:Antitrust law originated in reaction to a public outcry over trusts – corporate monopolies at the turn of the twentieth century (1890)Protect and preserve economic competitionProhibit deceptive and unfair business practicesProtect small businesses from economic pressures exerted by big business competitionPreserve values and customs of rural America (Lawrence, Weber, & Post, 2005, p.192-193)Five (5) major issues of antitrust policy (Meier et al, 1998, p.75-108)oMonopolies and trustsoCollusive behavioroMergersoPrice discriminationoExclusionary practicesProhibited activities include (Antitrust Resource Manual, n.d., n.p.)Page 1 of 10
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BMAL 560oBid rigging; form of price fixing and market allocationPage 2 of 10
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BMAL 560oPredatory pricing; practice of selling a products at low prices with intent of driving competitors out of the market, creates a barrier to market entryoPrice fixing; agreement between business competitors regarding pricingoTying; practice of making sale of one good conditional on purchase of anotheroVendor lock-in; situation in which a customer is dependent on a vendoroGeographic allocation; agreement between competitors not to compete within territoriesoWalker process fraud; illegal monopolization through maintenance and enforcement of a patent obtained via fraudPERSONS:Champions of Antitrust: (Werden, 1992)oSenator John Sherman (Ohio); sponsored legislation – led to Sherman Antitrust Act oCongressman Henry De Lamar Clayton (Alabama); sponsored legislation – led to Clayton Antitrust Act, also known as the Antimerger ActoSenator Joseph Robinson (Arkansas) and Congressman John Wright Patman (Texas); sponsored legislation – led to Robinson-Patman ActoCongressman Emanuel Celler (New York) and Senator Carey Kefauver (Tennessee); sponsored legislation – led to Celler-Kefauver ActoSenator Philip Hart (Michigan), Senator Hugh Scott (Pennsylvania), and Congressman
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