竞争法(双语)课程07-antimonopoly-law3-ADP课件.ppt

1、JUFE Yu Ling1Part 2Antimonopoly Law:Chinese PerspectiveJUFE Yu LingLearning Objectives(1)Define Dominant Market Position(2)Define Tying and Bundling(3)Explain Predatory Pricing(4)Explain RPM(5)Price Discrimination JUFE Yu Ling3Content1.Dominant Market Position2.Abuse of a Market Dominant Position3.T

2、ying and Bundling 4.Predatory Pricing5.Price DiscriminationJUFE Yu Ling4Chapter 6Abuse of a Market Dominant PositionJUFE Yu Ling1.Dominant Market Position(1)Definitiona)It refers to the undertaking(s)having the ability to control the price,quantity or other trading conditions of products in relevant

3、 market,or to hinder or affect other undertakings to enter the relevant market.JUFE Yu Lingb)The Original Power of Dominant PositionEconomic PowerIntellectual Property Rights Administrative PowerJUFE Yu Ling(2)Factors to finding dominant market position(i)market share in relevant market,and the comp

4、etition situation of the relevant market;(ii)ability to control the sales markets or the raw material purchasing markets;(iii)financial status and technical conditions of the undertaking;(iv)the degree of dependence of other undertakings;(v)entry to relevant market by other undertakings;(vi)other fa

5、ctors related to find a dominant market position.7JUFE Yu Ling(3)How to assume a dominant market position?a)Undertakings that have any of the following situations can be assumed to be have a dominant market position:(i)the relevant market share of one undertaking accounts for1/2 or above;(ii)the joi

6、nt relevant market share of two undertakings accounts for 2/3 or above;(iii)the joint relevant market share of three undertakings accounts for 3/4 or above.8JUFE Yu Ling(b)DefensesUndertakings with a market share of less than 1/10 will not be deemed as occupying a dominant market position even if th

7、ey fall within the scope of second or third item.When the Undertakings assumed to have a dominant market position can prove that they do not have a dominant market,shall not be assumed to have a dominant market position.9JUFE Yu Lingone 1/2 two 2/3 three 3/410JUFE Yu Ling2.Abuse of a Market Dominant

8、 Position The Requirements of Abusing 1)Undertakings of a dominant market position2)Abusing behaviors (i)sell commodities at unfairly high prices or buy commodities at unfairly low prices;(ii)sell commodities at prices below cost without legitimate reasons;(iii)refuse to trade with counterparty with

9、out legitimate reasons;11JUFE Yu Ling(iv)require its counterparty to trade exclusively with it or trade exclusively with the appointed undertakings without legitimate reasons;(v)tie products or require as unreasonable conditions for trading without legitimate reasons;(vi)apply dissimilar prices or o

10、ther transaction terms to equivalent counterparties;(vii)other conducts identified as abuse of a dominant position by antimonopoly execution authorities.12JUFE Yu LingJUFE Yu LingTying and bundling are so ubiquitous that we forget they are there.Tying and bundling are,roughly speaking,what the moder

11、n firm does.Its the rationale.It puts things together and offers them in packages to consumers.14JUFE Yu Ling15(1)DefinitionsBundlingTying pure bundling:selling products only as a bundle,not individually mixed bundling:selling products as a bundle and individually making the sale of one good(the tyi

12、ng good)conditional on the sale of another good(the tied good)Elements certain forms of bundling of two separate products through coercion(?)Economic conceptLegal conceptJUFE Yu LingChinaTying is the practice of making the sale of one good(the tying good)to the de facto or de jure customer condition

13、al on the purchase of a second distinctive good(the tied good).It is often illegal when the products are not naturally related.Ex.a bookstore requiring the customer buy an unpopular book before allowing them to purchase a bestseller.16JUFE Yu Ling(2)Why to tie?1)to exclude competitors 2)to raise the

14、 cost of competitors 3)to facilitate the conspiracy with the competitors 17JUFE Yu Ling18(3)Economic AnalysisChicago School Recognition of efficiencies reduction in production/distribution costs product improvement quality assurance/compatibility pricing Limited motive to leverage a monopoly into an

15、other market single monopoly profit theorem Tying is(almost)always benignClassical Tying Approach Leverage theory:a firm extends its dominance through tying and is able to earn a second monopoly profit“Tying deemed to serve no legitimate business purpose”Tying is(almost)always harmfulPost-Chicago Ch

16、icago School did not address oligopolistic markets Anti-competitive scenarios foreclosure of the competitive market protection of the monopoly market others?Tying is frequently benign but can be harmful in certain circumstancesJUFE Yu LingIn view of their potential efficiencies,many economists belie

17、ve that,in general,tying and bundling are more likely to be procompetitive than anticompetitive.19JUFE Yu Ling20(4)Error Cost Analysis(1)ActualImpactLegalStandardHarmfulNot HarmfulIllegalCases that are both harmful and illegalCases that are not harmful even though they violate the legal ruleLegalCas

18、es that are harmful even though they do not violate the legal ruleCases that are benign and legalKey Factorsfrequency of harmful casesrate of false acquittals and false convictionserror costsJUFE Yu Ling21Error Cost Analysis(2)Per Se Legality Rule of Reason Per Se IllegalityCourt of Appeals in Micro

19、soft IIICommission decision in MicrosoftModified Per Se-Jefferson ParishPer Se approach in Hilti and Tetra Pak IIStandard of proof for competitive harmEC lawU.S.lawEconomic AnalysisChicago SchoolPost-ChicagoClassical ApproachJUFE Yu Ling22(5)Legal Analysis(1)Modified Per Se of Jefferson ParishTestKe

20、y IssuesMarket dominanceSeparate products test+CoercionEffect on commerceJustification and defencesSeparate products test as a rough proxy for net efficienciesBias in Enforcement(over-enforcement)JUFE Yu Ling23Legal Analysis(2)Commissions Rule of Reason approach in MicrosoftTestKey IssuesMarket domi

21、nanceSeparate products testRestriction of competition+Efficiency justificationLow threshold for separate products testRequisite legal standardNeed for indispensability requirementJUFE Yu Ling Three legal approaches to tying the modified per se approach(Jefferson Parish)the per se approach(Hilti and

22、Tetra Pak II)the Commissions“rule of reason”approach24JUFE Yu Ling25(5)Conclusions1)Analysis of the anticompetitive effects of tying and bundling by U.S.courts,by contrast,has evolved over time.Major legal rules tend to be more hostile towards tying than is justified according to economic analysis.2

23、)Although courts long have expressed concern that tying or bundling might enable firms to use monopoly power in one market as leverage to curb competition,and thereby acquire monopoly power,in a second market,judicial concern has eased as tying and bundling have become better understood.JUFE Yu Ling

24、3)Judicial principle has been changed:During the past,it been thought to be worthy of per se condemnation without examination of any actual competitive effects.At present,it is deemed per se illegal under U.S.Supreme Court rulings only if specific conditions are met,including proof that the defendan

25、t has market power over the tying product.Further,the Supreme Court has recently recognized that competitive markets and tying arrangements are not incompatible.Indeed,some lower courts have required proof of likely or actual anticompetitive effects and efficiencies in tying cases.26JUFE Yu Ling(6)I

26、nternational Business Machines Corp.v.United States 1996Facts:IBM restrained its leaser of its tabulating machines to use other manufactures tabulating cards.The government thought IBM had violated the Clayton Act(38 Stat.730)and tried to declare the leasing contract was void under the Sherman Anti-

27、Trust Act.27JUFE Yu LingIBM insists its leases are lawful because its purpose and effect are only to the good will of its patrons by preventing the use of unsuitable cards which would interfere with the successful performance of its machines.The court holds IBM can list the specifications of tabulat

28、ing cards,which also can achieve the same effect.28JUFE Yu Ling4.Predatory Pricing(1)DefinitionPredatory pricing is the practice of selling a product or service at a very low price,intending to drive competitors out of the market,or create barriers to entry for potential new competitors.29JUFE Yu Li

29、ng(2)MechanismIf competitors or potential competitors cannot sustain equal or lower prices without losing money,they go out of business or choose not to enter the business.The predatory merchant then has fewer competitors or is even a de facto monopoly,and hypothetically could then raise prices abov

30、e what the market would otherwise bear.In essence,the predator undergoes short-term pain for long-term gain.30JUFE Yu Ling(3)The Risks Of The PredatorThe strategy may fail if competitors are stronger than expected,or competitors are driven out but replaced by others.In either case the predator canno

31、t endure the short-term losses31JUFE Yu Ling(4)Requirements to succeed1)The predator must have sufficient strength(financial reserves,guaranteed backing or other sources of offsetting revenue)to endure the initial lean period.2)There must be substantial barriers to entry for new competitors.32JUFE Y

32、u Ling(5)Legal EffectIn many countries predatory pricing is considered anti-competitive and is illegal under antitrust laws.It is usually difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition.In any case,competitors may be driven out

33、of the market before the case is ever heard.33JUFE Yu Ling(6)CriticismEconomists claim that true predatory pricing is rare because it is an irrational practice and that laws designed to prevent it only inhibit competition.Brooke Group v.Brown&Williamson TobaccoIn this case,the Federal Trade Commissi

34、on has not successfully prosecuted any company for predatory pricing since.34JUFE Yu Ling(7)Examples Of Alleged Predatory Pricing1)France Telecom/WanadooThe European Court of Justice judged that Wanadoo(Now Orange Internet France)charged less than cost in order to gain a lead in the French broadband

35、 market.They have been ordered to pay a fine of 10.35m,although this can still be contested.2)Microsoft released their web-browser Internet Explorer for free.As a result the market leader and primary competitor,Netscape,was forced to release Netscape Navigator for free in order to stay in the market

36、.Internet Explorers free inclusion in Windows led to it quickly becoming the web browser used by most computer users.35JUFE Yu Ling(7)Examples Of Alleged Predatory Pricing3)The German government ordered Wal-Mart to increase its prices.4)The French government ordered to stop offering free shipping to

37、 its customers,because it was in violation of French predatory pricing laws.After Amazon refused to obey the order,the government proceeded to fine them 1,000 per day.Amazon continued to pay the fines instead of ending its policy of offering free shipping.5)In the Darlington Bus War,Stagecoach Group

38、 offered free bus rides in order to put the rival Darlington Corporation Transport out of business.36JUFE Yu Ling5.Price Discrimination(1)DefinitionPrice discrimination exists when sales of identical goods or services are transacted at different prices from the same provider.In general,the practice

39、of charging different customers different prices is called price discrimination.37JUFE Yu Ling(2)EffectThe effects of price discrimination on social efficiency are unclear;typically such behavior leads to lower prices for some consumers and higher prices for others.Output can be expanded when price

40、discrimination is very efficient,but output can also decline when discrimination is more effective at extracting surplus from high-valued users than expanding sales to low valued users.Even if output remains constant,price discrimination can reduce efficiency by misallocating output among consumers.

41、38JUFE Yu Ling(3)Examples of price discrimination1)Retail price discriminationIn certain circumstances,it is a violation of the Robinson-Patman Act,for manufacturers of goods to sell their products to similarly situated retailers at different prices based solely on the volume of products purchased.2

42、)Employee discountsDiscounts that businesses give to their own employees are also a form of price discrimination.39JUFE Yu Ling3)Discounts for members of certain occupationsMany businesses,especially in the Southern United States,offer reduced prices to active military members.In addition to increas

43、ed sales to the target group,businesses benefit from the resulting positive publicity,leading to increased sales to the general public.Less publicized are discounts to other service workers such as police;off-duty police customers in high-crime areas are said to constitute free security.40JUFE Yu Li

44、ng4)Gender-based examplesMany gender-based price differences are held to be illegal in countries such as the United States and the United Kingdom.5)Ladies nightMany North American or European nightclubs feature a ladies night in which women are offered discount or free drinks,or are absolved from pa

45、yment of cover charges.This differs from conventional price discrimination in that the primary motive is not,usually,to increase revenue at the expense of consumer surplus.41JUFE Yu Ling6)HaircuttingWomens haircuts are often more expensive than mens haircuts because women generally have longer,more

46、complex hairstyles whereas men generally have shorter hairstyles.Some salons have modified their pricing to reflect long hair versus short hair or style instead of gender.This situation has been common practice in barber shops for decades.Additionally,women tend to be more concerned about haircare t

47、han men,hence an opportunity to charge a different price.42JUFE Yu Ling7)Dry cleaningDry cleaners typically charge higher prices for the laundering of womens clothes than for mens.Some US communities have reacted by outlawing the practice.Dry cleaners justify the price differences because womens clo

48、thes typically require far more time to press than mens clothes due to more pleating.8)Car insuranceMany insurance companies charge males more for car insurance because of perceived risk(i.e.what might happen,as opposed to what will happen).43JUFE Yu Ling9)Academic pricingCompanies will often offer

49、discounted software to students and faculty at K-12 and university levels.These may be labeled as academic versions,but perform the same as the full price retail software.Academic versions of the most expensive software suites may be priced as little as one fifth or less of retail price.Some academi

50、c software may have differing licenses than retail versions,usually disallowing their use in activities for profit or expiring the license after a given number of months.This also has the characteristics of an initial offer-that is,the profits from an academic customer may come partly in the form of