limiting_mkt_pwr

limiting_mkt_pwr - Overview: Limiting Market Power...

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Overview: Limiting Market Power • Introduction to Anti-trust • Price Fixing • Monopolization – Predatory Pricing – Tying and Extension of Monopoly • Other Practices • Common Property Resources 1
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“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible to prevent such meetings by any law which either could be executed, or would be consistent with liberty and justice.” Why Do We Care? Big money is involved . . . & even jail Roche vitamin division global fines = $1 billion! ADM executives sentenced to prison Managing anti-trust exposure is very important Can change the way a company conducts its business. Often a part of competitive strategy. Key consideration for mergers and acquisitions. About 90% of anti-trust cases in the U.S. are between companies 2
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Outline of U.S. Anti-Trust Laws Contract/Conspiracy Practices that Threaten Other “Unfair” Practices Restraint of Trade Competition Price Fixing M & A Æ concentration Deceptive Advertising Price Discrimination Labeling Explicit Dirty Tricks Implicit Monopolize (or attempt) Vertical Restraints Retail Price Maintenance Tying Contracts Exclusive Dealing Territorial Restrictions Exclusive Selling (Franchise) (Sherman Act) (Clayton and Robinson-Patman Acts) (Federal Trade Commission) Also: Individual States have specific antitrust laws 3
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Per se vs . Rule of Reason Price fixing is per se illegal Many other actions are judged according to a “rule of reason” – Is the practice likely to results in substantially
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This note was uploaded on 10/20/2011 for the course SLOAN 15.010 taught by Professor Berndt during the Fall '04 term at MIT.

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limiting_mkt_pwr - Overview: Limiting Market Power...

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