mono oligo monopolistic

8/8/2019 Mono Oligo Monopolistic

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Monopoly , Oligopoly andMonopolistic Competition


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Framework for Competition Analysis

Policy context and market environment:Govt Policy on Competition

Degree of govt ownership

Regulation

Trade policy

Size of domestic market

Vested interests

Technological Innovations

Competition authority


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Framework contd

Degree of competition:

Number of market players

Market concentration

Profitability

Entry and exit

Anti-competitive practices

Changes in market share (Brand Switching)


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Framework contd

Market outcomes:

Price

Competitiveness

Exports

Access to services

InnovationDomestic vs. foreign producers

Productivity Improvement


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A monopoly is a firm that is the sole seller of aproduct without close substitutes.

A monopoly firm has market power, the ability

to influence the market price of the product it

sells. A competitive firm has no market power.


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Why Monopolies Arise

The main cause of monopolies isb

arriersto entry other firms cannot enter the market.

Four sources of barriers to entry:

1. A single firm owns a key resource.E.g., DeBeers owns most of the worlds

diamond mines

2. The govt gives a single firm the exclusive right

to produce the good.

E.g., Indian Railways


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Why Monopolies Arise

3. Natural monopoly: a single firm can producethe entire market Qat lowerATC than could

several firms. Eg: Utilities

4. Coercive Monopoly: prohibits competitors from

entering the field: DeBeers controlled thedistribution channel till 2000 along with hoarding

to remove competition., Microsoft tying in of

Internet Explorer with OS


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Q

Cost

ATC

1000

`50

Example: 1000 homes need electricity.

ElectricityEconomies of

scale due tohuge FC

ATC is lower ifone firm services

all 1000 homesthan if two firmseach service500 homes. 500

`80

Natural monopoly:


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Monopoly vs. Competition: Demand Curves

In a competitive market,the market demand curve

slopes downward.

but the demand curve

for any individual firmsproduct is horizontal

at the market price.

The firm can increase Q

without lowering P,

so MR=P for the

competitive firm.

D

P

Q

A competitive firmsdemand curve


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Monopoly vs. Competition: Demand Curves

A monopolist is the onlyseller, so it faces the

market demand curve.

To sell a largerQ,

the firm must reduce P.

Thus,MRP.

D

P

Q

A monopolistsdemand curve


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Understanding the Monopolists MR

Increasing Qhas two effects on revenue:

The output effect:More output is sold, which raises revenue

Theprice effect:

The price falls, which lowers revenue To sell a largerQ, the monopolist must reduce the

price on all the units it sells.

Hence,MR


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Profit-Maximization

Like a competitive firm, a monopolist maximizesprofit by producing the quantity where MR=MC.

Once the monopolist identifies this quantity,

it sets the highest price consumers are willing to

pay for that quantity.

It finds this price from the D curve.


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Profit-Maximization

1. The profit-

maximizing Q

is where

MR=MC.

2. Find P from

the demand

curve at this Q.

Quantity

Costs andRevenue

MR

D

MC

Profit-maximizing output

P

Q


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The Monopolists Profit

As with a

competitive firm,the monopolists

profit equals

(P ATC) x Q

Quantity

Costs andRevenue

ATC

D

MR

MC

Q

P

ATC


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A Monopoly Does Not Have an S Curve

A competitive firm

takes Pas given

has a supply curve that shows how its Qdepends

on P

A monopoly firm

is a price-maker, not a price-taker

Qdoes not depend on P;

rather,Qand Pare jointly determined byMC,MR, and the demand curve.

So there is no supply curve for monopoly.


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Monopoly Drugs vs. Generic Drugs

Patents on new drugsgive a temporary

monopoly to the seller.

When thepatent expires,

the market

becomes competitive,

generics appear.

MC

Quantity

Price

D

MR

PM

QM

PC =

QC

The market fora typical drug


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The Welfare Cost of Monopoly

Recall: In a competitive market equilibrium,P=MCand total surplus is maximized.

In the monopoly eqm, P>MR=MC

The value to buyers of an additional unit (P)exceeds the cost of the resources needed toproduce that unit (MC).

The monopoly Qis too low

could increase total surplus with a largerQ. Thus, monopoly results in a deadweight loss orallocative inefficiency.


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P= MC

Deadweightloss

P

MC

The Welfare Cost of Monopoly

Competitive eqm:quantity =QE

P=MC

total surplus is

maximized

Monopoly eqm:

quantity =QM

P>MC

Quantity

Price

D

MR

MC

QM QE


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Price Discrimination

Price discrimination is the business practice ofselling the same good at different prices to

different buyers.

The characteristic used in price discrimination

is willingness to pay (WTP):

A firm can increase profit by charging a higherprice to buyers with higher WTP.


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Consumersurplus

Deadweightloss

Monopolyprofit

Perfect Price Discrimination vs.Single Price Monopoly

Here, the monopolistcharges the same

price (PM) to all

buyers.

A deadweight loss

results. MC

Quantity

Price

D

MR

PM

QM


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Monopolyprofit

Perfect Price Discrimination vs.Single Price Monopoly

Here, the monopolistproduces the

competitive quantity,

but charges each

buyer his or her WTP.This is called perfect

price discrimination.

The monopolist

captures all CSas profit.

But theres no DWL.

MC

Quantity

Price

D

MR

Q


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Price Discrimination in the Real World

In the real world, perfect price discrimination isnot possible:

no firm knows every buyers WTP buyers do not announce it to sellers

So, firms divide customers into groups

based on some observable trait

that is likely related to WTP, such as age.

Market Segmentation


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Observations

In the real world,

pure monopoly is rare. Yet, many firms have market power, due to

selling a unique variety of a product

having a large market share and few significantcompetitors

In many such cases, most of the ideas we have

seen here apply, including

markup of price over marginal cost deadweight loss


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Between Monopoly and Competition

Two extremes

Competitive markets: many firms, identicalproducts

Monopoly: one firm

In between these extremes

Oligopoly: only a few sellers offer similar oridentical products.

Monopolistic competition: many firms sellsimilar but not identical products.


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Measuring Market Concentration

Concentration ratio: the percentage of the

markets total output supplied by its four largest

firms ( or eight firms)

The higher the concentration ratio, lesser the

competition. Tentatively we can say:

0 % - Perfect competition

100 % - Oligopoly to Monopoly

0 50 % Monopolistic competition or Oligopoly

50 80 % - Oligopoly

An alternative method is HHI orHerfindahl Hirschman Index


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Industry >> General >> FactSheet

Industry - Steel - Large

Year End Sales Share Cum

1 S A I L 201003 40,520.24 30.33245 30

2 Tata Steel 201003 24,940.85 18.6701 493 JSW Steel 201003 18,202.48 13.62593 63

4 Ispat Inds. 201006 10,132.73 7.585111 70

5 Jindal Saw 201003 6,777.46 5.073439 75

6 JSL Stain. 201003 5,721.23 4.282771 80

7 Bhushan Steel 201003 5,611.27 4.200458 84

8 Uttam Galva 201003 4,495.66 3.36534 87

9 Lloyd Steel Inds 201003 2,898.72 2.16991 8910 Natl. Steel&Agro 201003 2,232.10 1.670895 91

11 Ramsarup Inds. 201003 2,056.95 1.539782 93

12 Mukand 201003 1,962.95 1.469416 94

13 Usha Martin 201003 1,850.39 1.385156 95

14 Surya Roshni 201003 1,777.90 1.330892 97

15 Sunflag Iron 201003 1,348.06 1.009124 98

16 ISMT 201003 1,193.27 0.893252 9917 M U S C O 201003 1,086.77 0.813529 99

18 Shah Alloys 201003 778.07 0.582444 100

133,587.10 100


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P Q

`0 140

5 130

10 120

15 11020 100

25 90

30 80

35 70

40 60

45 50

EXAMPLE: Cell Phone Duopoly in Smalltown

Smalltown has 140 residents

The good:

cell phone service with unlimited

anytime minutes and free phone

Smalltowns demand schedule

Two firms: Cingular, bRural

(duopoly: an oligopoly with two firms)

Each firms costs: FC= `0,MC= `10


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5045

6040

7035

8030

9025

1002011015

12010

1305

140`0

QP

1,750

1,800

1,750

1,600

1,350

1,000550

0

650

1,400

Profit

500

600

700

800

900

1,0001,100

1,200

1,300

`1,400

Cost

2,250

2,400

2,450

2,400

2,250

2,0001,650

1,200

650

`0

Revenue


Competitive

outcome:

P=MC=`10

Q= 120

Profit =`0

Competitive

outcome:

P=MC=`10

Q= 120

Profit =`0

Monopolyoutcome:

P=`40

Q=60

Profit =`1,800

Monopolyoutcome:

P=`40

Q=60

Profit =`1,800


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One possible duopoly outcome: collusion

Collusion: an agreement among firms in a

market about quantities to produce or prices to

charge

Cingular and bRural could agree to each producehalf of the monopoly output:

For each firm: Q=30,P=`40, profits =`900

Cartel: a group of firms acting in unison,e.g., Cingular and bRural in the outcome with

collusion


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"cartel" includes an association of producers,

sellers, distributors, traders or service providers

who, by agreement amongst themselves, limit,

control or attempt to control the production,

distribution, sale or price of, or, trade in goods orprovision of services;

(Competition Act 2002)


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DRAM Price Fixing:

Samsung is the third major semiconductor

company, after the Korean manufacturerHynixSemiconductor Inc. and the German

manufacturer Infineon Technologies AG, to

agree to plead guilty to fixing DRAM prices.

--US Dept of Justice


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Our competitors are our friends, our customers

are the enemy is an actual statement made by

an executive of Archer Daniel Midland, in the

famous case of the lysine (a feed additive)

cartel, which was caught on videotape by theFBI.


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Collusion vs. Self-Interest

Both firms would be better off if both stick to the

cartel agreement.

But each firm has incentive to renege on the

agreement.

It is difficult for oligopoly firms to form cartels and

honor their agreements (Cartels are not

sustainable over the long run).


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The distinction between cooperative and non-

cooperative games is unrelated to themathematical description by means of pure

strategies and pay-off functions of a game.

Rather, it depends on the possibility or

impossibility of coalitions, communication, andside-payments. Princeton PhDThesis of28

pages by Nash submitted in 1951

Nash describes the possible equilibrium in n-

person non-cooperative games and reduces the

results to include cooperative games as well.


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The Equilibrium for an Oligopoly

Nash equilibrium: a situation in which

economic participants interacting with one another

each choose their best strategy given the strategies

that all the others have chosen

Our duopoly example has a Nash equilibriumin which each firm produces Q=40.

Given that bRural produces Q=40,Cingulars best move is to produce Q=40.

Given that Cingular produces Q=40,bRurals best move is to produce Q=40.


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A Comparison of Market Outcomes

When firms in an oligopoly individually choose

production to maximize profit,

Qis greater than monopoly Qbut smaller than competitive market Q

Pis greater than competitive market Pbut less than monopoly P


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The Size of the Oligopoly

As the number of firms in the market increases,

the price effect becomes smaller the oligopoly looks more and more like a

competitive market

Papproaches MC the market quantity approaches the sociallyefficient quantity


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Game Theory

Game theory: the

study of how people

behave in strategic

situations.

Theory of rational

behavior for interactive

decision problems.


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Game Theory.

In a game, several agents strive to maximize

their (expected) utility index by choosing

particular courses of action, and each agent's

final utility payoffs depend on the profile of

courses of action chosen by allagents. Theinteractive situation, specified by the set of

participants, the possible courses of action of

each agent, and the set of all possible utility

payoffs, is called a game; the agents 'playing' agame are called theplayers.


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Game Theory

Dominant strategy: a strategy that is best

for a player in a game regardless of the

strategies chosen by the other players

Prisoners dilemma: a game between

two captured criminals that illustrateswhy cooperation is difficult even when it is

mutually beneficial. It is used to explain the basic

problem of when the pursuit of self-interest by

each player in a game leads to a poor outcome

for all


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An example of the fundamental problem of cooperation

is the case where two industrial nations have erected

trade barriers to each others exports. Because of themutual advantages of free trade, both countries would

be better off if these barriers were eliminated. But if

either country were to eliminate its barriers unilaterally,

it would find itself facing terms of trade that hurt its owneconomy. In fact, whatever one country does, the other

country is better off retaining its own trade barriers.

Each country has an incentive to retain trade barriers,

leading to a worse outcome than would have beenpossible had both countries cooperated with each

other.


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Prisoners Dilemma Example

The police have caught Ranga and Billa,

two suspected bank robbers, but only have

enough evidence to imprison each for 1 year.

The police question each in separate rooms,

offer each the following deal: If you confess and implicate your partner,

you go free.

If you do not confess but your partner implicatesyou, you get 20 years in prison.

If you both confess, each gets 8 years in prison.


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Prisoners Dilemma Example

Outcome: Ranga and Billa both confess,

each gets 8 years in prison.

Both would have been better off if both remained

silent.

But even if Ranga and Ranga had agreed before

being caught to remain silent, the logic of self-

interest takes over and leads them to confess.


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Robert Axelrod*s Question:

Under what conditions will cooperation emerge in a world

of egoists without central authority?

Axelrod ran several iterated Prisoners Dilemma

tournaments for computer programs. The winning

program was TIT FOR TAT

TIT FOR TATs Strategy:

1. Begin with cooperation

2. Respond to cooperation with cooperation

3. Respond to defection with defection

* Author of Evolution of Co-operation and Professor at University of Michigan


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Why People Sometimes Cooperate

When the game is repeated many times,

cooperation may be possible. (Iterative

Prisoners Dilemma)

Under suitable conditions, cooperation based

upon reciprocity can develop even betweenantagonists. An indefinite number of interactions,

therefore, is a condition under which cooperation

can emerge.

For cooperation to prove stable, the future must have a

sufficiently large shadow... the importance of the next

encounter between the same two individuals must be great

enough to make [noncooperation] an unprofitable strategy.

Side Stepping for a Moment Life


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Side-Stepping for a Moment - LifeLessons from TIT FORTAT

1. Dont be envious the success of others is aprerequisite for your own success

2. Dont be the first to defect cooperate aslong as you get cooperation in return

3. Reciprocate both cooperation and defection not forgiving and forgiving too easily can both

be costly

4. Dont be too clever being incomprehensibleis dangerous, to encourage cooperation you

need to make it easy for others to see your

intentions


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1. Resale Price Maintenance

Occurs when a manufacturer imposes lower limits

on the prices retailers can charge.

Is often opposed because it appears to reduce

competition at the retail level.

Yet, any market power the manufacturer hasis at the wholesale level; manufacturers do not

gain from restricting competition at the retail level.

The practice has a legitimate objective:preventing discount retailers from free-riding

on the services provided by full-service retailers.


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Competition Act on RPM

Anti-competitive agreements

3. (1) No enterprise or association of enterprises

or person or association of persons shall enter

into any agreement in respect of production,

supply, distribution, storage, acquisition orcontrol of goods or provision of services, which

causes or is likely to cause an appreciable

adverse effect on competition within India.


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Contd..

(4) Any agreement amongst enterprises or

persons at different stages or levels of the

production chain in different markets, in respect

of production, supply, distribution, storage, sale

or price of, or trade in goods or provision ofservices, including

(e) resale price maintenance, shall be an

agreement in contravention of sub-section (1) if

such agreement causes or is likely to cause anappreciable adverse effect on competition in

India.


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Contd..

Explanation

(e) "resale price maintenance" includes any

agreement to sell goods on condition that the

prices to be charged on the resale by the

purchaser shall be the prices stipulated by theseller unless it is clearly stated that prices lower

than those prices may be charged.


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2. Predatory Pricing

Occurs when a firm cuts prices to prevent entry

or drive a competitor out of the market,so that it can charge monopoly prices later.

Illegal under Competition Act, but hard for the

Competition Commission to determine when a

price cut is predatory and when it is competitive &

beneficial to consumers.


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The predatory price under the Competition Act

means the sale of goods or provision of services,

at a price which is below the cost, as may bedetermined by regulations, of production of goods

or provision of services, with a view to reduce

competition or eliminate the competitors

[Explanation (b) ofSection 4]

Many economists doubt that predatory pricing is a

rational strategy:

It involves selling at a loss, which is extremelycostly for the firm. It can backfire.


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Zenith, American TV set manufacturers alleged that the

Japanese companies were selling their products belowcosts in the US, while selling similar products in Japan

at above cost levels to crosssubsidise the former loss

making sales.

The predation recoupment story, therefore, does notmake sense, and we are left with the more plausible

inference that the defendants did not sell below cost in

the first place. They were just engaged in hard

competition. US Dept of Justice 1986


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According to an International Herald Tribune

article, the French government ordered

amazon.com to stop offering free shipping to its

customers, because it was in violation of French

predatory pricing laws. After Amazon refused toobey the order, the government proceeded to

fine them 1,000 per day. Amazon continued to

pay the fines instead of ending its policy of

offering free shipping.


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France Telecom/WanadooThe European

Court of Justice judged that Wanadoo (Now

Orange Internet France) charged less than cost

in order to gain a lead in the French broadband

market. They have been ordered to pay a fine of10.35m.

German government ordered Wal-Mart to

increase its prices in Germany.


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Unemployment due to slide-down of indigenous

retailers as a result of FDI in retail, sidelining of

consumers welfare due to predatory pricing by

retail giants, leading to their monopolistic

position and dictating of retail prices and undulyaffecting of farmers due to non-remunerative

prices, paid by procurement centres constituted

by big corporates.

Report of the Standing Committee on

FDI in Retail Sector.


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Chinese Tyres Vs ATMA


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Worried by massive 1300 per cent jump in tyre imports from

China in the last five years,(08.12.2008)Automotive Tyre

Manufacturers Association (ATMA) asked government to

immediately impose an anti-dumping duty on import of radial

truck and bus tyres.

Truck makers, including Tata Motors, have appealed to the

Centre against the anti-dumping duty on bus and truck radialtyres imported from China. Chinese radial tyre makers too

have made a similar appeal. The Designated Authority,

Directorate General of Anti-Dumping and Allied Duties,

recommended the imposition of definitive anti-dumping duty

on bus and truck radial tyres from China and Thailand inJanuary 2010, on a petition filed by the Automotive Tyre

Manufacturers Association. 13.07.2010


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3. Tying or Tie-in Arrangement

Occurs when a manufacturer bundles two products

together and sells them for one price (e.g., Microsoftincluding a browser with its operating system)

Critics argue that tying gives firms more market

power by connecting weak products to strong ones.

Others counter that tying cannot change market

power: Buyers are not willing to pay more for two

goods together than for the goods separately.

(a) "tie-in arrangement" includes any agreement requiring

a purchaser of goods, as a condition of such purchase, to

purchase some other goods;


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Observations

Oligopolies can end up looking like monopolies

or like competitive markets, depending on the

number of firms and how cooperative they are.

The prisoners dilemma shows how difficult it is

for firms to maintain cooperation, even whendoing so is in their best interest.

Policymakers use the competition laws to

regulate oligopolists behavior. The properscope of these laws is the subject of ongoing

controversy.


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Monopolistic Competition

Monopolistic competition:

a market structure in which many firms sellproducts that are similar but not identical.

Examples:

apartments books bottled water

clothing fast food


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Comparing Perfect & Monop. Competition

yesnone, price-takerfirm has market power?downward-

slopinghorizontalD curve facing firm

differentiatedidenticalthe products firms sell

zerozerolong-run econ. profits

yesyesfree entry/exit

manymanynumber of sellers

monopolistic

competition

perfect

competition


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C i Oli l & C i i


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Comparing Oligopoly & Monop. Competition

highlowlikelihood of fierce

competition

lowhigh

importance of strategic

interactions between firms

manyfewnumber of sellers

monopolistic

competitionoligopoly

A Mono oli ti all Com etiti e Fi m


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profit

ATC

P

A Monopolistically Competitive FirmEarning Profits in the Short Run

The firm faces adownward-sloping

D curve.

At each Q,MR


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losses

A Monopolistically Competitive FirmWithLosses in the Short Run

For this firm,P


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Monopolistic Competition and Monopoly

Short run: Under monopolistic competition,

firm behavior is very similar to monopoly.

Longrun: In monopolistic competition,

entry and exit drive economic profit to zero.

If profits in the short run:New firms enter market,taking some demand away from existing firms,prices and profits fall.

If losses in the short run:Some firms exit the market,remaining firms enjoy higher demand and prices.


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A Monopolistic Competitor in the Long Run

Entry and exitoccurs until

P=ATCand

profit = zero.

Notice that thefirm charges a

markup of price

over marginal

cost, and doesnot produce at

minimum ATC. Quantity

Price

ATC

D

MR

Q

MC

MC

P= ATC

markup

Why Monopolistic Competition Is


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Why Monopolistic Competition IsLess Efficient than Perfect Competition

1. Excess capacity The monopolistic competitor operates on the

downward-sloping part of its ATCcurve,produces less than the cost-minimizing output.

Under perfect competition, firms produce thequantity that minimizes ATC.

2. Markup over marginal cost

Under monopolistic competition,P>MC. Under perfect competition,P=MC.


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Monopolistic Competition and Welfare

Monopolistically competitive markets do not

have all the desirable welfare properties ofperfectly competitive markets.

Because P>MC, the market quantity is below

the socially efficient quantity. Yet, not easy for policymakers to fix this problem:

Firms earn zero profits, so cannot require them

to reduce prices.


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Monopolistic Competition and Welfare

Number of firms in the market may not be optimal,

due to external effects from the entry of new firms:

the product-variety externality:surplus consumers get from the introductionof new products

the business-stealing externality:losses incurred by existing firmswhen new firms enter market

The inefficiencies of monopolistic competition aresubtle and hard to measure. No easy way for

policymakers to improve the market outcome.

Ad i i


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Advertising

In monopolistically competitive industries,

product differentiation and markup pricinglead naturally to the use of advertising.

In general, the more differentiated the products,

the more advertising firms buy.

Economists disagree about the social value of

advertising.


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Th C iti f Ad ti i


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The Critique of Advertising

Critics of advertising believe:

Society is wasting the resources it devotes toadvertising.

Firms advertise to manipulate peoples tastes.

Advertising impedes competition it creates the perception that products aremore differentiated than they really are,allowing higher markups.


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Th D f f Ad ti i


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The Defense of Advertising

Defenders of advertising believe:

It provides useful information to buyers. Informed buyers can more easily find and

exploit price differences.

Thus, advertising promotes competition andreduces market power.

Ad ti i Si l f Q lit


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Advertising as a Signal of Quality

A firms willingness to spend huge amounts

on advertising may signal the quality of its productto consumers,regardless of the contentofads.

Ads may convince buyers to try a product once,

but the product must be of high quality for peopleto become repeat buyers.

The most expensive ads are not worthwhileunless they lead to repeat buyers.

When consumers see expensive ads,they think the product must be good if the companyis willing to spend so much on advertising.

B d N


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Brand Names

In many markets, brand name products coexist

with generic ones.

Firms with brand names usually spend more on

advertising, charge higher prices for the products.

As with advertising, there is disagreement aboutthe economics of brand names

Th C itiq of B and Nam


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The Critique of Brand Names

Critics of brand names believe:

Brand names cause consumers to perceivedifferences that do not really exist.

Consumers willingness to pay more for brand

names is irrational, fostered by advertising. Eliminating govt protection of trademarkswould reduce influence of brand names,result in lower prices.

The Defense of Brand Names


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The Defense of Brand Names

Defenders of brand names believe:

Brand names provide information about qualityto consumers.

Companies with brand names have incentive

to maintain quality, to protect the reputation oftheir brand names.

Observations


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Observations

Differentiated products are everywhere;

examples of monopolistic competition abound.

The theory of monopolistic competition

describes many markets in the economy,

yet offers little guidance to policymakers lookingto improve the markets allocation of resources.

Some more Anti Competitive


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Some more Anti CompetitivePractices

Oil companies to review petrol prices every

month The public sector oil companies: Indian

Oil Corporation,Hindustan Petroleum

Corporation, and Bharat Petroleum Corporation

will review petrol prices on a monthly basis. Andchanges in price, if any, will be through mutual

consensus and remain at a uniform rate for the

public sector undertaking (PSU) companies.

Business Line Dt 15.07.2010

(Price Fixing Legal or Illegal?)

Commerce Ministry for anti dumping duty on


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Commerce Ministry for anti-dumping duty on

Chinese chemical:Acting on a complaint by Tata

Chemicals, the Commerce Ministry hasrecommended imposition of anti-dumping duty on

imports of a chemical from China used in

household cleaning products.

Based on preliminary findings, the Directorate

General of Anti-dumping and Allied Duties (DGAD)

has recommended a provisional duty of up to

US$0.671 per kg on import of SodiumTripolyphosphate (STPP) from China.

Business Line Dt 28th May 2010

Advisory Panel on Institutions and Market


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Advisory Panel on Institutions and Market

Structure - Volume V RBIReport:

Under the provisions of Competition Act, every person orenterprise proposing to enter into a combination is

required to give notice to the Commission before

entering into a combination and wait for 210 days. This,

apart from delaying the whole process, is likely to raiseregulatory conflicts. This is applicable to all categories of

banks including SBI, its associates and nationalised

banks. Considering the gravity of the matter and the

repercussions, it is necessary to have a serious look into

the whole issue and if considered necessary, Central

Government should give exemption to banks under

Section 54 of Competition Act.

Anticompetitive Practices OECD Definition


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Anticompetitive Practices OECD Definition

Refers to a wide range of business practices in

which a firm or group of firms may engage inorder to restrict inter-firm competition to

maintain or increase their relative market

position and profits without necessarily providing

goods and services at a lower cost or of higher

quality.

Intel and AMD: A long history in court


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Intel and AMD: A long history in court 1991--AMD files an antitrust complaint in Northern

California claiming that Intel engaged in unlawful acts

designed to secure and maintain a monopoly.

1992--A court rules against Intel and awards AMD $10

million plus a royalty-free license to any Intel patents used

in AMD's own 386-style processor.

1995--AMD settles all outstanding legal disputes with Intel

in a deal that gives AMD a shared interest in the x86 chip

design, which remains to this day the basic architecture of

chips used to make personal computers.

2005--AMD files an antitrust suit against Intel in U.S. Thecomplaint alleges that Intel has unlawfully maintained its

monopoly in the x86 microprocessor market by coercing

customers worldwide from dealing with AMD.http://news.cnet.com/Intel-and-AMD-A-long-history-in-court/2100-1014_3-

5767146.html?tag=nw.20


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The Competition Commission of India (CCI) has

prepared a 245-page dossier detailing how the NationalStock Exchange (NSE) has over several years abused

its dominant position and financial muscle to kill

competition in the country's stock exchange space.

The investigation, carried out by a director general (DG)

of CCI, has found that NSE violated Section 4(2)( a)( ii),

and Section 4(2)( e) read with 4(1) of the Competition

Act, 2002. CCI has suggested several remedial

measures which could lead to the division of NSE intomore than one entity so that there is competition in the

country's stock exchange business. TOI 22.11.2010

List of ACP


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List of ACP

Dumping

Exclusive dealing

Price fixing

Refusal to deal

Dividing territories

Tying or Tie-in

Predatory pricing

Resale Price Maintenance

Absorption of a competitor

Subsidies from government

Protectionism, Tariffs and

Quotas

Bid rigging

mono oligo monopolistic

Documents