Price fixing is illegal under the competition act of 1998. When participants on the same side of the market (such as the big 4 in the UK supermarket sector) agree to sell a service, product or commodity at a fixed price it’s the consumers who must pay while retailers and suppliers reap the benefits. There are extremely heavy penalties for price fixing in the UK You can be fined, disqualified from being a director - or even sent to prison (Business Link No Date).
Price fixing and exclusive dealings are harmful for consumers and small businesses trying to compete with large businesses. The issues with price fixing is that the consumers have to buy an item for a certain price. There is no supply and demand, along with the fact that the prices can fluctuate without any certain pattern. As the prices become higher, the company get
When consumers decide to purchase a product or service a car, a new refrigerator, or prescription drugs, the goal of the antitrust laws is to make sure their choices are not restricted unreasonably. Consumer choice is a powerful incentive for the sellers of any products to keep their prices low and their quality high. When the antitrust laws are vigorously enforced, businesses must respond to what consumers want. A business that ignores consumer wishes, by refusing either to keep prices competitive or to offer
The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and covers and sets new performance standards for boards of directors and managers of companies and accounting mechanisms of all publicly traded companies in America. It also introduces criminal liability for the board of directors and a requirement by
When a group of retailers and wholesalers of a particular product decided to all raise prices together and they are accused of overpricing customers. Which federal law allowed the United States to investigate this anti- competitive method ?
The United States antitrust legislation is a legislation designed to break up and prevent the formation of new monopolies to increase competition and societal welfare. Thus the United State Antitrust law is a collection of both state and federal government laws enacted to promote fair competition in the economy. The antitrust laws main statutes consist of the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. In combination these acts have enforced the proper rules and regulations that businesses must conform to today to ensure that there is a healthy competition within the economy to not only the benefit of the consumers who utilize these services and goods but for the health of the businesses who make up our market industries.
Barriers to entry - Sunk cost, technology, economies of scale, limiting pricing and brand loyalty of incumbents can all be barriers
One major piece of legislation formed to counter this threat to a free market society, is the Sherman act of 1890. This is a very simple law that contains two important sections. A small summary of these sections are as follows. A company cannot form a binding contract that interferes with the business of other states. The second section
Predatory pricing is an exclusionary act by which a firm, in order to create or maintain a monopoly power, lowers its prices below the profit maximizing level in order to push rival firms out of the market or prevent them from ever entering the market. In the long run, this results to be a detriment to consumers. Once the competition has left the market, the company can then raise prices to a supracompetitive level and recoup the losses suffered by predatory pricing. This results in higher prices for the consumer. With no alternative product available, the consumer is left with no choice but to pay the high price.
Consumers are the end user of products & services. Antitrust law makes products & services more affordable by lowing the prices & better products as well as services. Antitrust law have made it harder for companies to survive because of the level of competition, so only the best survives, companies who fail to meet & understand the needs of customers slowly elope due to the competitive battle. “When competitors agree to fix prices, rig bids, or allocate (divide up) customers, consumers lose the benefits of competition. The prices that result when competitors agree in these ways are artificially high”. Higher prices won’t always reflect the accurate cost, so therefore
Please explain and specify what clauses (at least 2 or 3 clauses) within the Sherman and Clayton Antitrust acts have protected/hurt consumers and business from the ills of monopolies.
A: The State wins because “illegal price fixing includes setting minimum or maximum prices or fixing the quantity of a product or service to be produced or provided,” (p.176). Foundation established a maximum fee schedule, thus fixing a maximum price and engaging in a per se violation of Section 1 of the Sherman Act. The State wins because Foundation established a maximum fee schedule and participated in a price fixing per se violation of Section 1 of the Sherman Act according to page 176 of the textbook.
The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence. In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting. Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a