Why is Antitrust activity so harmful to consumers and the economy? What, if anything, can
consumers, competitors, or or the government due to prevent or detect this activity?
Solution
Answer:-
Before Understanding the Antitrust Activity let us understand what is \"Antitrust law\" this will
give you true picture of antitrust activites and how they are harmful to consumers.
Antitrust laws, also referred to as \"competition laws,\" are statutes developed by the U.S.
Government to protect consumers from predatory business practices by ensuring that fair
competition exists in an open-market.economy.
Some of Antitrust Activites are :- Causing un fair competition in economy using following
activites
1.Market Allocation
2.Bid Rigging
3.Price Fixing
4.Monopolies
5.Mergers and Acquisitions.
In short, They prohibit a variety of practices that restrain trade. Examples of illegal practices are
price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular
markets, and predatory acts designed to achieve or maintain monopoly power.
All such activities will eliminated healthy competition out of the market and will give rise to
unsatisfactory prices, price discriminations , excess increase in prices over a period of time,
creation of monopoly.
this will affect the consumer badly and create a disturbed trade environment in the country.
2.How to prevent or detect these activites ?
Answer:-
FEMA and state and local government agencies with whom FEMA is coordinating begin to
solicit competitive bids for rebuilding contracts, the Antitrust Division is prepared to provide
assistance to these agencies to protect against bid rigging, price fixing and other collusive
conduct among companies competing for rebuilding contracts.
Price fixing, bid rigging, and other collusive agreements can be established either by direct
evidence, such as the testimony of a participant, or by circumstantial evidence, such as
suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.
If a Consumer . Competitior or Government have these kind of evidence in possession with them
, they can deliver these to FEMA and state and local government agencies to prevent such
antitrust activites .
Now Let us understand how to detect them:-
1. Market Allocation :-
In this scheme, co-conspirators agree to divide up customers or geographic areas. The result is
that the coconspirators will not bid or will submit only complementary bids when a solicitation
for bids is made by a customer or in an area not assigned to them. This scheme is most
commonly found in the service sector and may involve quoted prices for services as opposed to
bids.
2. Bid Rigging:-
In this type of scheme, one or more competitors agree not to bid, or withdraw a previously
submitted bid, so that a designated bidder will win. In return, the non-bidder may receive a
subcontract or payoff.
3. Price Fixing:-
Price Fixing impacts procurement when business is condu.
IGNOU MSCCFT and PGDCFT Exam Question Pattern: MCFT003 Counselling and Family...
Why is Antitrust activity so harmful to consumers and the economy W.pdf
1. Why is Antitrust activity so harmful to consumers and the economy? What, if anything, can
consumers, competitors, or or the government due to prevent or detect this activity?
Solution
Answer:-
Before Understanding the Antitrust Activity let us understand what is "Antitrust law" this will
give you true picture of antitrust activites and how they are harmful to consumers.
Antitrust laws, also referred to as "competition laws," are statutes developed by the U.S.
Government to protect consumers from predatory business practices by ensuring that fair
competition exists in an open-market.economy.
Some of Antitrust Activites are :- Causing un fair competition in economy using following
activites
1.Market Allocation
2.Bid Rigging
3.Price Fixing
4.Monopolies
5.Mergers and Acquisitions.
In short, They prohibit a variety of practices that restrain trade. Examples of illegal practices are
price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular
markets, and predatory acts designed to achieve or maintain monopoly power.
All such activities will eliminated healthy competition out of the market and will give rise to
unsatisfactory prices, price discriminations , excess increase in prices over a period of time,
creation of monopoly.
this will affect the consumer badly and create a disturbed trade environment in the country.
2.How to prevent or detect these activites ?
Answer:-
FEMA and state and local government agencies with whom FEMA is coordinating begin to
solicit competitive bids for rebuilding contracts, the Antitrust Division is prepared to provide
assistance to these agencies to protect against bid rigging, price fixing and other collusive
conduct among companies competing for rebuilding contracts.
Price fixing, bid rigging, and other collusive agreements can be established either by direct
evidence, such as the testimony of a participant, or by circumstantial evidence, such as
suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.
If a Consumer . Competitior or Government have these kind of evidence in possession with them
2. , they can deliver these to FEMA and state and local government agencies to prevent such
antitrust activites .
Now Let us understand how to detect them:-
1. Market Allocation :-
In this scheme, co-conspirators agree to divide up customers or geographic areas. The result is
that the coconspirators will not bid or will submit only complementary bids when a solicitation
for bids is made by a customer or in an area not assigned to them. This scheme is most
commonly found in the service sector and may involve quoted prices for services as opposed to
bids.
2. Bid Rigging:-
In this type of scheme, one or more competitors agree not to bid, or withdraw a previously
submitted bid, so that a designated bidder will win. In return, the non-bidder may receive a
subcontract or payoff.
3. Price Fixing:-
Price Fixing impacts procurement when business is conducted through purchase order or direct
purchase. In this situation, competitors may agree to raise or fix prices they will charge for their
goods or services, set a minimum price that they will not sell below, or reduce or eliminate
discounts.
Suspicious Indicators:
4. Monopolies :-
Suspicious Indicators:
REPORT YOUR SUSPICIONS
FEMA AND LOCAL GOVERNMENT AGENCIES, encourage all agents, auditors, and
procurement officials to report suspicions of collusion through appropriate channels in your
organization. Your observations may add to information they already have about an industry or,
together with other reports, indicate a more widespread problem. Your call will always be
appreciated and treated in accordance with our confidentiality policy, and, when warranted, they
will conduct an investigation.