This website uses cookies to ensure you have the best experience. Learn more

Antitrust Practices And Market Power Essay

668 words - 3 pages

Antitrust Practices and Market Power
Apple was investigated and subsequently ruled against in United States District Court giving the US Justice Department an antitrust victory. The case alleged Apple had colluded with five major publishers to fix the prices of electronic books (e-books). In 2010 Apple introduced an in which the publishers set retail prices in return for a commission paid to Apple. The publishers were under a contract which said in the price of an e-book available through Apple’s iBookstore changes the publishers were required to match the change. The e-book prices subsequently went up. Apple was charged with conspiring to fix e-book prices.
Apple was investigated under the Clayton Act because the publishers were required to match the price of competitors who also provide e-books to Apples iBookstore. The Clayton Act section 2 prohibits price discrimination between different purchasers if it lessens competition. Contracts requiring a customer to change their agreed upon price in relation to competition prices degrades competitive nature of business. This clause in the contacts Apple had with these publishers would force the publishers to change prices as the competition changed regardless of possible profit or loss to the publisher. Apple would still receive a commission without respect to the publishers benefit.
The Justice Department is asking for reparations consisting of the termination of Apple’s contracts with all five publishers. The government wants to ban Apple’s ability to enter into agreements with e-book suppliers, music, movies, and television shows if the agreement may cause an increase in the price competitors must charge. Other competitors such as Amazon and Barnes and Nobles are allowed to sell e-book for their iPad and iPhone applications for two years free of commissions to Apple.
Monopolies and oligopolies are not always a benefit or a hindrance to society. The poor judgment of the upper management controls the effect on society of the company’s impact on society. Incessant need to...

Find Another Essay On Antitrust Practices and Market Power

America's Antitrust Legislation and the New Global Economy

909 words - 4 pages competition is foreign competition they can spend less money on advertising and other cost consuming practices of competition. A monopoly is a market situation in which there is only one seller of a particular good or service. When companies exercise monopoly power they act as if they were monopolies. Government regulation of big business/monopoly power arose because of the following accusations: monopolies raise prices

Laws for Fair, Balanced and Competitive Business Practice

815 words - 4 pages United States has several laws that ensure that competition among businesses flow rely and new competitors get free access to the market. These laws intend to ensure fair and balanced competitive business practices. However, there are times when some businesses will do anything to gain competitive edge. USA has string antitrust laws that prohibit fixing market price, price discrimination, conspiring boycott, monopolizing, and adopting unfair

The Antitrust Laws

1210 words - 5 pages that once were predators became prey, whether it be a natural disaster or the Antitrust laws they no longer had control over the whole. The Antitrust laws have had a positive impact on American society through restricting monopolies; ensuring that no single business can control a market then using that power to exploit customers, protecting the public from price fixing, and producing new higher quality and innovative products through competition

Article summary

649 words - 3 pages susceptible to these charges if opponents can prove that predatory pricing was manipulated in a way that pushed AMD out of the market; however, AMD continues to be in the market. When AMD captured the market, Intel "improved its technology [to] recover shares" unlawfully in that "U.S. antitrust laws permits a company to hold an outsize share of the market [as] long as it doesn't use power to limit competition" (BusinessWeek, 2008). According the U.S

EU Ciompetition Law

1222 words - 5 pages , 2014, Oxford University Press. • Szczepański M., Facilitating damage claims by victims of anti-competitive practices, 9 September 2013, Library of the European Parliament. • Wils P.J. W., The relationship between Public and Antitrust Enforcement and Private Actions for Damages, Vol. 32, No.1, March 2009, World Competition.

Antirust Law: I Like a Little Competition

2526 words - 10 pages prices based off of market supply and demand, and provides an incentive for companies to decrease prices and increase quality. For these reasons, a healthy economic market in which firms can compete to acquire ownership of new resources and have the ability to enter into new markets, needs to be supported by enforceable laws. Antitrust laws have become an integral part of how modern businesses operate in increasingly more complex markets and

European Competition Law

1936 words - 8 pages new Directive, in order to reach at the final draft. With the adoption of the new Directive, there may be a balance between private and public enforcement. Public enforcement In EU competition law, the public enforcement refers to the antitrust rules that are enforced by state authorities. Europe supports more the public enforcement rather than private enforcement. Under Regulation 1/2003 the Commission has the power to act as an

Microsoft Antitrust trial: Argument for both sides

2278 words - 9 pages increase competitors' access to the market. However, in 1995, a federal judge rejected the agreement, citing evidence of other monopolistic practices by Microsoft.According to West's Encyclopedia of American Law, available at http://iris.nyit.edu/~shartman/mba0101/trust.htm, "Antitrust law seeks to make businesses compete fairly," as there is legislation in place in the US to regulate trade and commerce by "preventing unlawful restraints, price

Fair Business Practices: Why Do We Need It?

1016 words - 5 pages The United States has an abundance of fair practices laws that intend to make things fair, yet competitive. I feel that these laws are absolutely effective in helping to balance our country. Fair practices in business protect the businesses as well as the consumers in many ways including: monopolization protection, conspiring to fix pricing or allocate customers, price gouging, and many other important protections (SBA, 2013). In 1890 Congress

credit card ethics

1701 words - 7 pages current structure would do nothing to benefit consumers; it would only benefit a single competitor—American Express, which is already, by dollar volume, the largest issuer in the industry” (Hanft, 2000, 2). The part of the DOJ self-proclaimed mission statement that would apply to this case is, “They prohibit a variety of practices that restrain trade…and predatory acts designed to achieve or maintain monopoly power” (United States Government Antitrust

Do we need government intervention in the form of Competition Policy ? if so, Why? Applied and discuss based on case study or research

1715 words - 7 pages competition policy?Abuse of market power is best tackled through antitrust policy. Externalities can be reduced through regulation, a tax or subsidy, or by using property rights to force the market to take into account the welfare of all who are affected by an economic activity.Airline Deregulation encouraged competition so there are more discount tickets available. After deregulation, customers benefited from travelling by discount tickets, and saved from

Similar Essays

Titled Antitrust Lawsuits, Monopolies, And Anticompetitive Business Practices In Today's Economy

3008 words - 12 pages Darren SchaeferDr. ForanEnglish 10210 March 2002Antitrust Lawsuits, Monopolies, and Anticompetitive Business Practices in Today's EconomyIn July of 1890, the Sherman Antitrust was passed by the U.S. Congress through the efforts of Senator John Sherman of Ohio. That act is the basic federal enactment that regulates the operations of corporate trusts. The act declared illegal every contract, combination in the form of trust or otherwise, or

Switching Costs In Australian Home Market And Its Effect On Market Power Of Suppliers

1201 words - 5 pages I. Introduction Australia’s housing sector has long been characterised by relatively high homeownership rates and a predominance of variable-rate mortgages (Luci, Lawson & Roberts, 2003, Pg.1). This is why taking on a home loan is one of the common practices in Australia, and a lot of banks and creditors are involved in the market. There are a lot of factors in considering a home loan, namely the switching cost, and the most substantial of

The Wind Turbine Market And Wind Energy As A Long Term Source Of Power Generation

702 words - 3 pages on the wind energy map, the industry is generating enormous opportunities for all players, as well as challenges to improve competitiveness and position wind energy as a long-term reliable source of power generation. • The Intensity of Competitive Rivalry Although the wind turbine industry is very attractive, it has remained a relatively exclusive market due to the high level of technology and capital risk. A large amount of technical know-how is

Marginalised Groups In Society Are Often Forced To Collude With The Dominant Culture's Practices And Beliefs In Order To Survive In A World Of Unequal Power Relations. Discuss With No Sugar

922 words - 4 pages Marginalised groups in society are often forced to collude with the dominant cultures practices and beliefs in order to survive in a world of unequal power relations. Discuss. - TEE Q1 1998When certain racial groups are marginalised, such as in a postcolonial society, they are forced to collude with the dominant culture's practices in order to survive. In Australian history, Aborigines were marginalised by paternalistic, oppressive policies