Eic Unit 9

Unit:9
Antitrust and Information

Policy
Antitrust
• Antitrust laws, also referred to as "competition laws," are statutes
developed by the U.S. Government to protect consumers from
predatory business practices by ensuring that fair competition exists
in an open-market economy.
• Also known as anti-monopoly law in china and Russia, In EU known as
both antitrust and competition law.
Competition
Key to survival in any market driven economy.
Competition among firms , business houses or organization reduces

cost, improve productivity and quality, innovation etc...
Competition is consumer’s best friends.

Policy Overview
We have developed three major themes in this book, each of which
raises questions for government policy.
Differentiation of products and prices.
Lock-in.
Positive feedback.
Differentiation of products and prices.
Production of first copy of information goods are high which leads to

products and price differentiation.
Mass customization, differential pricing, personalized content,

versioning are natural outcome in information industry and such
strategy raise about antitrust issue about fair competition.
Is it discriminatory to charge different users different prices for

essentially the same product?
Lock-in
Since information products work together in systems, switching any
single product can be very costly to users.
Lock-in resulting from high switching cost confers a huge competitive

advantage on firms that know how to take advantages of it.
Will you be branded an aftermarket monopolist under antitrust law if

you are the sole supplier to some locked-in customers?
Positive Feedback
Positive feedback based on network externalities is ubiquitous in the
information economy
If you agree to cooperate with your rivals to establish standards, you
run the risk of violating laws against cartels and of collusion.
 alternatively, if you compete and win, you may be guilty of
monopolization, depending on the tactics you employed to gain or
keep control over the market.
Even if you avoid antitrust entanglements, you may have to deal with
regulatory agencies such as the FCC (Federal Communications
Commission) .
Price Differentiation
We already discuss about differential pricing, which is a natural way
to reduce high fixed costs of Information and Information technology.
But the Robinson-Patman Act of 1936 ( or Anti-Price Discrimination
Act) says that such price discrimination is illegal if it "effectively
lessens competition," and many antitrust cases have been brought on
these grounds.
Example: a group of pharmaceutical drug manufacturers has been
facing a massive antitrust action the past several years in part
because they each set drug prices lower for hospitals and HMOs than
for retail drug stores.
Price Differentiation
Robinson-Patman Act has been widely criticized on both legal and
economic grounds, but it's the law.
Three primary legal arguments that render the vast majority of price
differentiation immune from successful legal challenge
You are allowed to set lower prices that result from lower costs.
You are allowed to set differential prices to meet the competition.
Differential pricing is only questionable if it "lessens competition.“
Competition Policy
The Sherman Act (1890)
The Sherman Act (1890) makes it illegal to "monopolize" a market.
The law attempts to prevent the artificial raising of prices by
restriction of trade or supply.
The purpose of the Sherman Act is not to protect competitors from
harm from legitimately successful businesses, nor to prevent
businesses from gaining honest profits from consumers, but rather to
preserve a competitive marketplace to protect consumers from
abuses.
The Clayton Act (1914)
The Clayton Act (1914) prevents mergers likely to "substantially lessen
competition.“
It provided more detailed provisions to prohibit anticompetitive price
discrimination, kept corporations from making exclusive dealing practices
and expanded the ability for individuals to sue for damages.
Price Discrimination: The Clayton Act addresses corporate price
discrimination.
Exclusive Deals: The Clayton Act also prevents companies from selling
products with the condition that the buyer can only use their product.
Mergers: The most important provision of this act however is the prevention
of anticompetitive mergers.
Anticompetitive Practices (Nepali
Context)
Creating Artificial Scarcity
Collective Price Fixing
Market Sharing Cartel
Collusive Bidding or tendering
Resale Price maintenance
Tie-up Sales
Telecommunications regulation and policy
See ICT Policy 2072
IT Policy 2067
See Dursanchar Niti 2060

Eic Unit 9

Uploaded by

Copyright:

Available Formats

Eic Unit 9

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Eic Unit 9

Uploaded by

Copyright:

Available Formats

Unit:9

Antitrust and Information

Competition among firms , business houses or organization reduces

Competition is consumer’s best friends.

Production of first copy of information goods are high which leads to

Mass customization, differential pricing, personalized content,

Is it discriminatory to charge different users different prices for

Lock-in resulting from high switching cost confers a huge competitive

Will you be branded an aftermarket monopolist under antitrust law if

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.