Anti-competitive Practices - Anti-competitive Practices

Anti-competitive Practices

These can include:

• Dumping, where a company sells a product in a competitive market at a loss. Though the company loses money for each sale, the company hopes to force other competitors out of the market, after which the company would be free to raise prices for a greater profit.
• Exclusive dealing, where a retailer or wholesaler is obliged by contract to only purchase from the contracted supplier.
• Price fixing, where companies collude to set prices, effectively dismantling the free market.
• Refusal to deal, e.g., two companies agree not to use a certain vendor
• Dividing territories, an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories.
• Limit Pricing, where the price is set by a monopolist at a level intended to discourage entry into a market.
• Tying, where products that aren't naturally related must be purchased together.
• Resale price maintenance, where resellers are not allowed to set prices independently.

Also criticized are:

• Absorption of a competitor or competing technology, where the powerful firm effectively co-opts or swallows its competitor rather than see it either compete directly or be absorbed by another firm.
• Subsidies from government which allow a firm to function without being profitable, giving them an advantage over competition or effectively barring competition
• Regulations which place costly restrictions on firms that less wealthy firms cannot afford to implement
• Protectionism, Tariffs and Quotas which give firms insulation from competitive forces
• Patent misuse and copyright misuse, such as fraudulently obtaining a patent, copyright, or other form of intellectual property; or using such legal devices to gain advantage in an unrelated market.
• Digital rights management which prevents owners from selling used media, as would normally be allowed by the first sale doctrine.