Competition Issues
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Competition Issues
Competition issues
Curated by Mo Tanweer
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The flaw that broke the construction cartel's back

The flaw that broke the construction cartel's back | Competition Issues | Scoop.it
A R4.7-billion construction cabal was brought down by one player refusing to pay the others their dues.
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James Bourn's comment, January 18, 2015 2:29 PM
This article shows collusion in the construction industry in South Africa. Firms would pay "loser fees" to other firms that helped them win building contracts, including some during the 2010 world cup. Loser fees are compensation for firms who helped other firms get government contracts more easily by putting in low tenders. The loser fees were between 1%-3% of the contract price. Shareholders benefitted as there were more profits made meaning more dividends could be given and further investment could also be made. The estimated cost is 2.8 billion rand.
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Roche, Novartis Eye-Drug Collusion Allegations Studied by EU

The European Union’s antitrust chief said regulators are “gathering information” on whether Roche Holding AG and Novartis AG colluded to prevent the use of Roche’s cancer drug Avastin to treat an eye disease.
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Jimmy Kong's comment, January 18, 2015 2:57 PM
Roche and Novartis collusion results in the prevention of doctors from prescribing cheaper substitute drugs. Therefore, the doctors have to prescribe more expensive drugs to patients. This of course, would bring up the cost of the treatment, which results in the decrease in consumer surplus and increase in producer surplus. Since drugs are demand inelastic, these companies are able to receive greater super normal profit, thus increasing their market share and decreasing the number of competition within the industry, which can harm consumers furthermore in the long run.
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France fines cosmetic companies €950m for price collusion

France fines cosmetic companies €950m for price collusion | Competition Issues | Scoop.it
Thirteen top manufacturers of cosmetics and cleaning products slapped with €950m in fines for price collusion between 2003 and 2006
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George Barker's comment, January 17, 2015 4:07 AM
In this article you can see there has been clear collusion between the top thirteen manufactures of cleaning and cosmetic products between 2003 and 2006. This is cartel has a significant amount of members.
The significance of this collusive behaviour is the markets in which it takes place, for example within the cosmetic and household cleaning market, where many people have to use these products for everyday life. This will affect the standard of living of the countries in which the price rise takes place. Furthermore the amount of firms which are involved hence the total size of the fines of 950m Euros
Colgate- Palmolive and SC Johnson have benefitted from the Leniency Notice, therefore by whistle blowing on the other members of this cartel involved in these restrictive practices they have received either full or partial exoneration from the fines.
The largest fine of 189m Euros was given to L’Oreal due to its majority stake within the cosmetics sector, and the second largest of 173m Euros was given to Uniliver, with the second largest stake.
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Supermarkets exploiting suppliers through their monopsony power

Supermarkets exploiting suppliers through their monopsony power | Competition Issues | Scoop.it

Supermarkets exploiting suppliers through their monopsony power:

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11348602/More-than-100-suppliers-could-go-bust-from-supermarket-price-war.html ;

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Samuel Titcomb's comment, January 18, 2015 8:07 PM
These UK supermarkets are using their monopsony power to exploit suppliers creating the argument that they are, together, performing tacit collusion. This has been argued to be mainly due the fact that in a highly competitive market, with budget firms like Aldi and Lidl pushing down prices, the other firms in the industry will have to follow because of the strategic interdependence which is especially prevalent in this market.
Samuel Titcomb's comment, January 18, 2015 8:11 PM
However, even though the suppliers are not benefiting from this, the consumers are because they are seeing lower food and drink prices. This has increased their consumer surplus and especially so in a market where changes in price affect the poorest the most.
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BP and Shell accused of diesel price fixing in South Africa - Telegraph

BP and Shell accused of diesel price fixing in South Africa - Telegraph | Competition Issues | Scoop.it
BP and Royal Dutch Shell have been accused of colluding with four other oil companies to fix diesel prices for more than 15 years.
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Ben Graves's comment, January 16, 2015 5:00 PM
The size of the fine imposed, if the six firms are found guilty of anti-competitive behaviour, is worth bearing in mind. Firstly, the obvious point to mention is the duration of anti-competitive behaviour which totals to more than 15 years which means the fine imposed will be a greater one. Secondly, and more importantly, the article shows the widespread influence this price collusion has had on particularly the South African economy. "Farmers, fishing and mining industries and the transport industry were all likely to have suffered as a result of the alleged price fixing and market division." The reason it has effected such a range of industries within the economy is that South Africa is a resource rich country and therefore relies on fuel to power the machinery needed to extract these resources. South Africa consumes 24 billion litres of petrol and diesel per year and therefore any 'artificially high prices' are going to affect both producers (who have higher costs of production) and potentially the consumers, depending whether producers pass on the increased costs. It will also clearly effect the direct consumers from the six oil companies as diesel prices are higher for domestic consumption, for example in fueling diesel powered cars. Therefore, in my opinion, not only do the firms need to be fined, they need to be fined a major sum due to the extended time period and the wide-reaching effects of their actions.
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France fines 13 consumer goods firms €951m for price-fixing

France fines 13 consumer goods firms €951m for price-fixing | Competition Issues | Scoop.it
Unilever, Procter & Gamble and Gillette are among those facing penalties for colluding on price rises between 2003 and 2006
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Tom Wardle's comment, January 16, 2015 5:16 PM
13 consumer goods firms were fined a total of £748 million for price fixing between the years 2003 and 2006. In keeping prices artificially high, consumer surplus was reduced and as the French cleaning products market and personal hygiene markets are worth a respective €4.7billion and €7billion per annum, the fine was significant. Persil only made provisions of €39million but yet they face a fine of €109million. This example of collusion was indeed overt as commercial directors were even caught in the act in 2006 at a Parisian brasserie. Both markets are dominated by 8 firms with the largest 3 accounting for 43% of the personal hygiene market. L'oreal’s 28% market share is the greatest within this industry.
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Samsung launches first Tizen phone

Samsung launches first Tizen phone | Competition Issues | Scoop.it
Samsung Electronics launches the world's first smartphone powered by Tizen operating system, seen as an alternative to Google's Android.
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Britain's richest 1% own as much as poorest 55% of population

Britain's richest 1% own as much as poorest 55% of population | Competition Issues | Scoop.it
ONS figures reveal growing wealth disparity and north-south divide, with nation's top 10% owning 44% of household wealth
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Did the Saudis and the US collude in dropping oil prices? - On Line Opinion - 5/1/2015

Did the Saudis and the US collude in dropping oil prices? - On Line Opinion - 5/1/2015 | Competition Issues | Scoop.it
The explanation, while difficult to prove, may revolve around control of oil and gas in the Middle East and the weakening of Russia, Iran and Syria by flooding the market with cheap oil.
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Eliza Thompson's comment, January 16, 2015 4:17 PM
The accusation is that Saudi Arabia, through OPEC, and the USA and colluding to reduce the price oil, harming most f the world exporters of oil. The article points out that it may be to punish Russia and Iran for supporting the murderous regime in Syria, although this seems to be very extreme on the part of the USA because they don’t benefit publicly and they may loose out from the fall in price themselves by the loss of investment in the expensive production of their shale oil they may face.
Eliza Thompson's comment, January 19, 2015 4:00 AM
This collusion if it could be fined internationally may not face too big a fine because this market failure of collusion is correcting the market failure of artificially high prices. Although it is not making stable prices and it has a very widespread effect across the world, even been a main factor for deflationary pressure in the Eurozone.
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Barclays fined £26m for trader’s gold rigging - FT.com

Barclays fined £26m for trader’s gold rigging - FT.com | Competition Issues | Scoop.it
A shadow has been cast over another key global financial benchmark after UK regulators found that a Barclays trader had manipulated the London gold fix that is used to value billions of dollars of derivatives contracts annually. The UK’s Financial
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China levies LCD price fixing fines

China levies LCD price fixing fines | Competition Issues | Scoop.it
Samsung, LG and four Taiwanese firms are fined £35m by Chinese trade regulators for fixing LCD screen prices.
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Flora van Vredenburch's comment, January 18, 2015 10:29 AM
6 Firms were involved in this price fixing, which resulted in a high concentration ratio of the industry. This therefore means that consumer surplus decreased, and producer surplus decreased.

It was not only the consumer to suffer from this consequence, it was also shops who sold the LCD screens as they had to pay the premium price and therefore increase the cost to the consumer. Costoc claimed that they needed 47millionUSD in damages because of the price fixing that occurred over 8 years.
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Shell and BP accused of collusion in South Africa

Shell and BP accused of collusion in South Africa | Competition Issues | Scoop.it
A six-company price-fixing racket spanning decades.
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will fennell's comment, January 16, 2015 4:11 PM

Six oil companies including Shell and BP stood before the South African Competition Tribunal in a case which started in 2009. They were found of price fixing through tacit collusion, keeping diesel prices ‘artificially high’. They were found of sharing commercially sensitive information between each other, thus allowing them to track each other’s sales and to align their strategies in the market.

They were also found of colluding to influence the regulatory environment of South Africa's fuel market, attempting to raise barriers to entry for new firms in order to maintain the status quo. In South Africa, diesel is used heavily in the transport industry, so the impacts were wide spread in the economy, especially in fishing, mining and agriculture.
will fennell's comment, January 16, 2015 4:12 PM

Six oil companies including Shell and BP stood before the South African Competition Tribunal in a case which started in 2009. They were found of price fixing through tacit collusion, keeping diesel prices ‘artificially high’. They were found of sharing commercially sensitive information between each other, thus allowing them to track each other’s sales and to align their strategies in the market.

They were also found of colluding to influence the regulatory environment of South Africa's fuel market, attempting to raise barriers to entry for new firms in order to maintain the status quo. In South Africa, diesel is used heavily in the transport industry, so the impacts were wide spread in the economy, especially in fishing, mining and agriculture.
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France fines cosmetic companies €950m for price collusion

France fines cosmetic companies €950m for price collusion | Competition Issues | Scoop.it
Thirteen top manufacturers of cosmetics and cleaning products slapped with €950m in fines for price collusion between 2003 and 2006
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Petrol below £1 a litre triggers fresh price war at supermarkets | The Times

Petrol below £1 a litre triggers fresh price war at supermarkets | The Times | Competition Issues | Scoop.it
Supermarkets launch more petrol price cuts, after a Birmingham garage slashed its prices below psychologically important £1 a litre mark
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​Disruptive technology: Uber

​Disruptive technology: Uber | Competition Issues | Scoop.it
Technology always disrupts markets. It provides dynamic efficiency improvements, creates new markets, destroys old ones, and in some cases destroys monopolies and in others, creates new monopolies.The Luddites were 19th-century English textile artisans who protested against newly developed labour-saving machinery from 1811 to 1817. The stocking frames, spinning frames and power.
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Unit 3 Micro: Should Tesco be broken up?

Unit 3 Micro: Should Tesco be broken up? | Competition Issues | Scoop.it
The supermarket giant Tesco is under increasing pressure! Tesco is Britain’s biggest retailer (it has 29% of the UK groceries market) and the biggest private-sector employer, and it runs about 7,000 stores worldwide. But it is facing significant commercial challenges from discount retailers such as Aldi and Lidl and seems to be squeezed.
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