This document explores the advantages of cartels for companies, including national and international price increases, economies of scale, and R&D sharing. However, it also highlights the negative consequences of imperfect competition, such as higher prices and reduced consumer choice. The study of a market involves analyzing the competitive situation and detecting cartels and monopolies. Competition policy is a necessity when competition is imperfect, and market regulation can encourage pricing differentiation strategies. The document concludes that a competitive market with multiple actors is favorable to consumers, leading to lower prices and increased innovation.
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[...] Monopolies have multiple origins 2. Which require surveillance by public authorities 2.1. Detecting cartels The application of antitrust laws and the repression of unfair competition requires detecting abuses of dominant positions on opaque markets where transparency is scarce. These are complex, long-term processes due to a lack of voluntary visibility in a non-competitive situation. The practices of investigation by institutions fighting unfair competition to find evidence are similar to espionage, mobilize the police for long and thorough investigations and interrogations of executives. [...]
[...] The reasons for the fine are as follows: to favor a clean service at the expense of others, to use existing market shares to prevent other actors from entering the market or gaining PDMs, to bribe a major client to become its sole and exclusive supplier, to impose one of its products and prevent those of competitors, to continue an unfair practice despite a condemnation. Significant examples are the fines imposed on web and tech giants by the European Commission between 2008 and 2018 in Europe and in the US for abuse of dominant position (single player). The range of these fines can vary between ?2.43 M and ?860 M Antitrust laws in Europe and the US are a complex policy to implement (opacity) but severe repression. Fine by the EC: ?2.9 M for the truck manufacturers cartel. Obstruction of competition. [...]
[...] doc (on price variation depending on market competitive situation)- STEP PLAN Accepted PLAN Rejected PLAN Rejected Justification: This plan reprises in two parts the problem raised by our subject: - Imperfect competition exists? (and it poses a problem) - It is therefore necessary to find a solution (specialized institutions to apply the law) Each sub-part details a useful argument and follows our logic of reasoning. Reminder of the subject : Using my knowledge and documents, I will show that Competition policy is a necessity when competition is imperfect. [...]
[...] STEP 3 Documentary Dossier Information related to the subject Course extensions or links between docs Doc 1 - Price increase in a cartel (advantage) - Opaque practices - Recall of the criteria of pure and perfect competition (an ideal to be approached) - Unfair practices: price-fixing agreements, economies of scale, service sharing, opaque agreements against progress and environmental advancements - Doc 3 for price increase (telecom cartel in France) Doc 2 - SANCTION: Existence of specialized institutions to enforce antitrust laws and impose fines - Motifs of the fine: favoring a service unique to the detriment of others, using existing market shares to prevent other actors from entering the market or gaining market share, bribing a major client to become its sole and exclusive supplier, imposing one's own product and preventing those of competitors, continuing an unfair practice despite a condemnation. - Examples of web and tech giants in Europe and the US - Very high fines - Effective repression? Not always because they target actors with very high turnover and therefore between paying a fine or losing market share by giving up the cartel, the choice is quickly made. is no text provided to translate, I will wait for the actual text to be translated. [...]
[...] Indeed, this creates anti-competitive situations, which are grouped under the term of 'imperfect competition'. 1.1. Concentrations lead to oligopolies A market is in an oligopolistic situation as soon as the supply is shared among a small number of major players. When there are few suppliers on the market, the degree of competitive intensity is lower, suppliers can agree on prices, and therefore these prices are not in favor of consumers. The example of the telecommunications cartel in France is evocative of this situation and these unfair practices. [...]
