This document discusses various concepts related to corporate social responsibility towards competition, including unfair competition, antitrust laws, cartels, intellectual property rights, and determining a just price. It provides examples of unfair trade practices like price fixing between competitors and abusing market dominance. The document also discusses anti-trust laws and how they prohibit practices like price fixing, abuses of market power, and agreements between competitors to restrict output.

1. Corporate Social Responsibility Towards the Competition By Raymund N. Sanchez

2. Agenda Overview of CSR

3. Unfair competition - Definition

4. - Antitrust laws

5. - Microsoft case Cartels

6. Intellectual Property Rights

7. Blood Diamonds

8. CSR Overview CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

9. Unfair Trade Practices Resorting to unethical business behavior to gain a competitive edge (advertising fraud, patent/ trademark infringement, socially irresponsible gimmicks, etc.)

10. Reasons why companies resort to Unfair Trade Practices Globalization of competition

11. Better informed & more discerning customers

12. Increasing number of competitors

13. Rapid advance in both soft & hard technology

14. Advances in scientific fields

15. In short, competition is getting stiffer & stiffer, Any kind of edge will count, which is why some companies resort to unethical practices.

16. When profit maximization becomes the sole driving force of the business that it pursues it with any means necessary. Resorting to: Fraud

17. Violation of human dignity

18. Patent/Trademark infringement

19. Socially irresponsible gimmicks

20. others When does competition become UNFAIR ?

21. Anti Trust Laws Trust: or corporate monopoly was created for the purpose of eliminating competition in an area of business & of controlling the market for a product

22. Coverage of Anti Trust Laws Price fixing between competitors

23. Abuses of market power by a monopolist or dominant firm

24. Agreement between competitors to restrict output

25. Price Fixing between Competitors PRICE: often the principal way by which firms compete

26. Agreements on price initiatives, price ranges, price targets, collusion between competitors on floor prices are generally illegal under antitrust laws

27. Price Fixing between Competitors Are similarity of prices, simultaneous price changes, or high price, indications of price fixing? NO, not always Supply & Demand can cause these. Price fixing must be PROVEN. (systematic exchanges of pricing information between competitors)

28. How do we determine the “Just Price” Pricing Process: requires business to effectively calculate resources/needs, supply/demand.

29. Just Price: one in which both buyer & seller are given what is due them (price a manufacturer charges its customers for G&S is total cost of investment plus normal profit)

30. How do we determine the “Just Price” “ Buying & selling were instituted for the common good of both parties since each needs the product of the other... Therefore, the contract between them should rest upon equality of thing to things. The measure of a value of a thing which is exchanged should be given by its money price. Hence to sell a thing dearer or buy it cheaper than it is worth is unjust” -St. Thomas Aquinas

31. How do we determine the “Just Price” Prada

32. Louis Vuitton

33. Rolex

34. Rolls Royce

35. Q: Do these products ask for a “Just Price”?

36. Abusing Market Dominance Dominance: refers to a position of considerable economic power in a market held over a period of time

37. Abusing Market Dominance Q1: Is Being Dominant bad? Q2: Why is the law punishing companies for being too good at what they do?

38. Abusing Market Dominance Conduct of dominant companies that violate antitrust laws: Refusal to supply for non-objective reasons

39. Unfair discrimination between equivalent transactions

40. Non-objective refusal to grant access to essential facilities

41. Unfair / predatory pricing

42. Engaging in practices to raise rivals costs or foreclose competitor entry

43. Unfair rebating practices & customer ties

44. Case Study – Microsoft IE During the browser wars, 95% of PC were pre-loaded with Windows

45. Microsoft's IE was introduced in 1995 due to being incorporated into the Windows 95 OS

46. Market share diminished from Netscape who then charged Microsoft with anti competitive behavior

47. Oligopoly: Agreements between competitors Oligopoly: agreements between competitors wherein prices can be set at highly profitable levels & restricts competition

48. Oligopoly: Agreements between competitors Why is Oligopoly wrong? 1) It is basically a monopoly 2) No competition = no benefit to the consumer -no improved product quality -no better price -no choice

49. Cartels A cartel is a formal (explicit) agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production.

50. Cartels Strategies of Cartels Market division & market sharing

51. Agreements between competitors to restrict output

52. Collective boycotts

53. Resale price maintenance agreements

54. Cartels Market division & market sharing: conformity among competitors to divide sales territories or allocate customers (agreement not to compete)

55. Cartels Agreements between competitors to restrict output: collusion between competitors to restrict production facilities in order to drive up the price

56. Cartels Collective boycotts: conformity between competitors not to deal with anther person or business (illegal because it twists/deforms the competitive process by foreclosing competitive opportunities for suppliers or by denying customer choice)

57. Cartels Resale price maintenance agreements: agreement between a supplier & dealer that fixes the minimum resale price of a product

58. Grey Areas An agreement between competitors to adopt standards that require fire-resistant materials for certain products. Con: The agreement to adopt is restrictive. The manufacturers have limited their own ability to use other materials & have limited supplier choice Pro: Will benefit consumers in terms of safety Q: Is this a Cartel? Should this be illegal?

59. Intellectual Property Rights Intellectual Property: Constitutes those original creative works that have economic value & are protected by law

60. Reasons for Intellectual Property Rights They reward the creators of original works by preventing others from copying, performing or distributing those works without permission

61. They provide incentives for people to produce scientific & creative works that benefit society at large

62. Intellectual Property Rights Patent law: protects inventions that demonstrate technological progress

63. Intellectual Property Rights Copyright law: protects a variety of literary & artistic works, including paintings sculpture, prose, poetry, plays, musical competitions, dances, photographs, motion pictures, radio, TV, computer programs

64. Intellectual Property Rights Trademark law: protects words & symbols that serve to identify different brands of G&S in the marketplace

65. Intellectual Property Rights Q: By assigning exclusive rights to an idea/thing, doesn't it make IPR anti-competitive? A: Trick Question. IPR has an expiration date.

66. Intellectual Property Rights By giving IPR a termination date, it allows society to benefit from the idea/thing after the inventor has had an opportunity to earn a good/fair/reasonable reward. Note: trademarks never expire

67. Intellectual Property Rights Counterfeiting: a criminal offense of making an imitation of an article with intent to defraud others into accepting it as a genuine item

68. Intellectual Property Rights Is piracy truly a 'Victimless' Crime? No! 1) Creators are robbed of income supposed to be for them 2) Consumers receive defective products

69. Intellectual Property Rights Reverse Engineering: process of analyzing & copying products off the competitor, sufficient to replicate the parts using appropriate fabrication techniques & coming out with new products in the company's own version

70. Intellectual Property Rights How do we protect IPR? Government implementation

71. Improved technology (digital watermarks)

72. Consumer understanding

73. References Corporate Social Responsibility, Basic Principles & Best Practices by Jose Mario B. Maximo

74. Multinationals & Corporate Social Responsibility by Jennifer A Zerk

75. -END-