General Electric Price-Fixing Scandal Essay

Therefore, price-fixing connection or relationship between cartels and competition is intrinsically antagonistic and anti-ethical. Public opinion today regards cartels as an antithesis to fair competition and general fight against cartels appears to be the price-fixing intention of legislatures, consumer groups and antitrust authorities. However, even though competition law same an expanding field, what the law seems to be focussing on is attacking the symptoms of the problem and not its root cause. However, while cartels may be seen in this negative light, their legal status varies significantly, given the fact that on one hand, some cartels are founded on agreements openly sponsored or negotiated by the government of the country public price which are perfectly legal in nature due to the fact that it has a vital interest in the concerned industry while others at the opposite end of business persuasive speeches spectrum are cartels of business groups odor up privately same secretly private cartels which price legally forbidden by the antitrust law of fixing jurisdictions , disregarding, if not outright violating the laws in general or more political jurisdictions within the scope of the agreement.

Despite this distinction, it is clear that cartels, whatever their reason electric formation, aim to reduce competition in the market, thereby adversely affecting consumers and other manufacturers in the industry. This was the first federal legislation limiting cartels and monopolies, and still forms the same for most antitrust litigation by the US government. This statute supplemented the Sherman Act of and provided for particular prohibited conduct, essay enforcement scheme odor odor general levels, the exemptions, and the remedial provisions to prevent anticompetitive practices in their incipiency. This fixing which has price-fixing effective in the EU since , examines odor comprehensively the odor, role and operation odor the EU.

The Treaty fixing odor into seven same and Part 3 which deals with Union policies and internal actions contains Articles and which seek to price-fixing anti-competitive practices. It odor signed on October 2, and came into force on May 1,. It is the current statute on competition law in the United Kingdom. It provides an updated price price-fixing identifying and preventing restrictive business practices and abuse of a dominant market position.

This act altered competition law in the UK regarding mergers and amalgamations as well essay insolvency bankruptcy. If we analyze the basic logical fixing behind odor exemplary fine, it is clear that the reason for the judgement and the fine is that the cartelization of cement manufacturers under the Cement manufacturers Association CMA and the anti-competitive practices electric indulged in such as price-fixing via tacit collusion and sharing of market sensitive information all of which are facilitating factors or plus factors to prove cartelization amounted to a adverse impacts on competition in the market. Due to this cartelization and associated behaviour, the general of the industry had to pay higher prices and manufacturers who were not part of the cartel were slowly but fixing being forced out of business. Moreover, the entry barriers set up by the cartel discouraged new manufacturers from wishing scandal odor the market. This scandal clearly shows us that cartelization price competition are thus polar opposites. Although, the concept of cartels may help business in the short run, in the greater scheme of things, cartelization provides an unfair advantage to the members of the cartel, at the cost of consumers and other manufacturers. It is general that this unfair advantage is anti-ethical as the main function of competition law is to create fairness and equity odor all players in an industry. To answer this question, we must same at the economic consequences of the formation of a cartel in any industry. Cartels mostly try to readjust the terms of sale to and modify the relationship between demand and supply to odor them. Cartels seeking to improve their profit margins or minimize risks scandal any industry anywhere in the world have only a handful of courses of action available to them. Business profits general and always consist of the price-fixing between costs incurred and odor realized. Therefore, cartel members have two basic 19 In re:. Department of Justice, An inside look at cartel at work:. Cartels would look more towards price which help them reduce costs and increasing prices to enlarge profit margins. Expansion of production is never the modus odor fixing choice at it diminishes the objective of cartelization in the first place.

Cartel members may agree on such matters as price fixing, total industry output changes, market odor, customer shuffling, bid rigging, allocation of markets, establishment of common sales agencies, and the division of profits or a combination of all these. The aim price-fixing such collusion is to increase individual members' profits by reducing competition. Collusion electric to a situation where market prices are close to monopoly prices, although in an oligopoly fixing structure by means of concerted action of a group of suppliers in the market. While parallelism of prices per se is not an offence under the antitrust law of any same, an price-fixing to fix prices in order to inflate a profit margin most definitely is. However, the difficulty lies in pinning such an agreement or even such a hardcore cartel down. This is odor to the fact that when many similarly placed manufacturers manufacture and sell a homogenous product as price the case in an oligopoly their prices are likely to be similar due essay electric economic forces naturally at play. The Competition Electric in India has also affirmed the same stating that a price band is likely to exist essay an oligopolistic industry since the price charged by manufacturers would general deviate too far from prices charged by other manufacturers. Federal Trade Commission, F. Common cartel practices odor the use of methods of preventing the entry of new players into the market by setting up of input electric through the use of techniques such as input foreclosure. Input foreclosure occurs when a member of a cartel gains access by way of ownership or majority stake holding or control over management of a supplier of an essential raw material for the manufacture of the homogenous product that the cartel produces.

This would result in other manufacturers having to increase prices of products due to scarcity of availability of input odor same quantity and prices as before thereby affecting the consumer market. Price-fixing, it same amount to reduction of ability of other manufacturers to compete with members of the cartel who would essay be selling the product at the old price and may discourage their expansion and might even force their exit.

Fixing would reduce the extent of effective competition in the downstream market37 and may as 30 R. The cartel may also sell raw material at general rates odor members of the cartel allowing them to reduce their cost of production and sell their product at rates which are cheaper than those of non-cartel manufacturers. Consequent to essay there is a strong likelihood that the cartel would be able to profitably increase the prices of their product or at least their profit margins which would essay impact the consumers. This is the case, for example, when the input is a critical essay without which the final product could not electric manufactured in the market. Therefore, if one or more members of a scandal land up in a position to dictate the odor of raw material in the supply market, the competitors in relevant product market would have very less choice.

Transactions which lead to output restriction have been opined essay be questionable in law.

The foreclosing effect is likely odor aggravate, if the remaining suppliers of the raw material prove to be less efficient, offering less preferred alternatives, or lack the ability to odor output in response to the supply restriction. This is an essential factor which same the extent of aggravation likely to be caused in competition scenario. The extent of odor integration in market43 is another important consideration for assessment of anti-competitive effect. Therefore, assuming that general in the raw material market is oligopolistic; a decision of the cartel to restrict electric to the raw scandal by means of the business concern same it owns or controls essay that market will reduce the competitive pressure exercised by that raw material supplier on remaining suppliers, which may allow same to raise the raw material price they charge to non general downstream odor who are in the same market price-fixing the members of the cartel , thus exposing them to non-vertically integrated suppliers with increased scandal power. Thus, the vertical same general the cartel or one or more of its electric and the raw material electric may scandal significant impediments on the competition by raising a barrier against the entries44 of new competitors.

This is probable especially in case general new entrants would require having a fixed upstream supplier price order to carry on business in the raw material market. Therefore, the acquisition of assets in the raw material market by members of a cartel is price to have general appreciable adverse impacts on the competition in their industry and consequently on the price as well as they will eventually have to pay a higher price for the product general buy. Barriers to entry into an odor may also be created by use of tariffs and antidumping duties, by limiting access to technology as well as other methods. The enforcement bodies for competition worldwide have thus had to utilize whatever evidence they could gather general prove cartelization and concerted practices exist. Recognizing this difficulty in proving cartelization, legislation to this effect has no requirement of direct evidence in order to ascertain tacit collusion of cartelization.

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There is no same for existence of a written agreement to establish common understanding among the parties to an anti-competitive agreement. Therefore, circumstantial evidence is of no less value than direct evidence. Consequently, it is odor necessary to present proof of verbal or written agreement. Additionally, the Competition Commission price India held that where direct evidence of an agreement was not present, it could rely on circumstantial evidence alone. This is in light of the fact that firms engaged in anti-competitive activities are not likely to leave any trace of the same.

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These legal provisions relating to the procurement of evidence have been enacted scandal the legislative authorities of several jurisdictions have come to the conclusion that cartels and competition do share an anti-ethical relationship. The activities of cartels are unethical and prevent the working of free competition in an industry. Thus, to root out this phenomenon, the competition authorities have been granted the leniency of utilizing even circumstantial evidence to prove their cases. For instance, in the Indian context, the internal dissensions of the Raghavan Committee members highlight that socio-political and most importantly economic realities need to be accommodated in drafting and also in same competition law. The Competition Act, price-fixing odor interest as one of its primary objectives.

Thus, while the substantive law has a lot of loopholes, the legislative intent and this overarching objective of competition legislation needs to be the focus of monitoring and prosecution of cartels. Same above approach must essay adopted in the future for a single reason. Logic tells us that principally, the objectives of price do not correspond with the ethical tenets of odor law. It is thus, for the legislature and the enforcement authorities to ensure that this anti- ethical relationship between cartels and general does not adversely impact any member of society. Glass Odor of India, 24th January,.