...its search power to drive traffic to its own properties over rival sites and services. After a nearly twenty month high-profile investigation, the federal government announced on January 3, 2013, that its dropping an “exhaustive” probe into Google as it found no evidence the company was abusing its search power. Google was investigated under violating the Sherman antitrust act. “The definitive antitrust statute, passed by Congress in 1890, that prohibits monopolies or unreasonable combinations of companies to restrict or in any way control interstate commerce. Specifically outlawed is two or more persons engaging in monopolistic practices, such as price fixing, although it does not outlaw price-fixing per se. It was amended in 1914 by the Clayton Act, which outlaws interlocking directorates and deals with acquisitions that aim to restrain or eliminate competition. (Your Dictionary Law)” “For example, one element of a duty-to-deal claim under the Sherman Act is proving that Google’s treatment of rival websites harms consumers; even the cleverest economist would be stumped with that assignment. (Singer, 2012)” The Sherman Act prohibits monopolies, attempts to monopolize, or conspiracies to monopolize. A monopoly is a form of market structure where only one or very few companies dominate the total sales of a particular product or service, such as Google. A big competitor is Yahoo. The public suffers under a monopolistic market because it does not have...
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...oversupplies of mix. To induce customers to buy the oversupply, retailers are having to offer deep discounts on the mix. Legal Reasoning: What type of arrangement is this? What law applies? What are the elements of the law? Is the Maple Corporation arrangement legal in your opinion? Why? This is an example of a Tying Arrangement – an agreement between a buyer and a seller under which the buyer of a specific product or service is obligated to purchase additional products or services from the seller. The antitrust law applies in this situation, due to the fact that the law restricts business practices that are considered to be monopolistic or which restrain interstate commerce. This law consists of two acts – the Sherman Act, and the Clayton Act. The Sherman Act declares illegal every contract, combination or conspiracy in restraint of trade or commerce between states or foreign countries. Restraint of trade is defined as “any activity which tends to limit trade, sales and transportation in interstate commerce or has a substantial impact on interstate commerce. Such restraint tends to restrict production, affect prices, or otherwise control the market to the detriment of purchasers or consumers of goods and services.” The...
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... and what services are allowed for consumers. The importance of regulating monopolies is to keep the market alive, to allow freedom for other smaller businesses. This keeps up competition in the market, and also keeps the monopolies from doing anything unreasonable. This has led to numerous trials on major companies, one of the biggest cases would be the trial against Microsoft INC. Acts for Regulating Monopolies: In 1890 the Sherman Antitrust act was put into effect, named after the Senator of Ohio, John Sherman and was the first component for congress to prohibit trust.(General Records of the United States Government, Record number 11) The Sherman Act intended by congress to help keep up competition in markets. Unfortunately the act was written to vague there were loopholes to the act and in only five short years the Congress picked apart the act. The act was used again later down the road to successfully help the economy. In 1904 the Sherman act was used to resolve the Northern Securities Company in State of Minnesota v. Northern Securities Company and by 1911, President Taft used the act against the Standard Oil Company and the American Tobacco...
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...of production stay in the market. Inefficient firms that fail to understand consumer needs, eventually lose in the market. If open market competition was nonexistent, cartels and monopolies would be free to distort the allocation of society’s resources for economic profit in the long run. This would result in economic loss to consumers as well as competitive harm to the economy. In the United States, the basic federal antitrust laws are: The Sherman Act of 1890, the Clayton Act (1914) and the Federal Trade Commission Act of 1914. The Sherman Act prohibits the restraint of trade and the creation of monopolies and is an important part of economic legislation in the United States. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids or engage in other competitive activity. Corporations or individuals in violation of the Sherman Act face large fines and/or imprisonment and must make restitution to the consumers for overcharges. The Clayton Act of 1914 is a supplement to the Sherman Anti-trust act. It deals with specific types of restraints including exclusive arrangements, tie-in sales, price discrimination and mergers and acquisitions....
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...company and the merchant. However, the company did not have any right to arbitrate any claim “on a class action basis”. Despite the agreement, the merchant filed a class action, which claimed that petitioners violated §1 of the Sherman Act. They were seeking treble damages for the class under §4 of the Clayton Act. The merchant claimed that American Express Company charged merchants a rate 30% higher than fees charged for competing cards. Due to the company’s monopoly nature of business, merchants were forced to accept these rates. The lawsuits were dismissed by the District Court after the merchant countered the move to individual arbitration under the Federal Arbitration Act (FAA). The cost to prove the antitrust claims would have exceeded the maximum recovery for such a move, on the merchant’s part. (AMERICAN EXPRESS COMPANY, ET AL., PETITIONERS v. ITALIAN COLORS RESTAURANT ET AL., 2013) In the case described above, oligopoly or monopoly-like companies can be viewed negatively because it shows that they take advantage of how much power they have over the general population surrounding their business. However, they may not always be bad for customers. Since oligopoly market structure is made of just a few companies, customers can easily conduct price comparisons between the few companies. Additionally, oligopoly companies conduct research on each other to effectively compete for customers. Many times, this competition leads to “price-matching” with each other. Again, customers win...
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...RLAT Task 4 Labor Unions Historically, labor unions were created to protect the American worker from business management. Throughout the years, many laws have been enacted to protect the American worker and businesses. With the decline in our labor force and shrinking wages and benefits, do they continue to be relevant today? The story of American labor is dramatically relevant to today’s society. There are very little issues that is or has not been influenced by the labor’s organized efforts or lack of them. (Cahn, 1972) Labor organization in the mid-nineteenthy century was not new to America, and it was inevitable due to the working people being confronted by common problems causing them to unite their protection efforts. There was mutual aid or societies for masters, journeymen, and apprentices. They were usually founded to provide insurance against accidents and sickness. In 1801, an early labor organization announced the purpose of said insurance, and they were called the Society of Mechanics. Society or association was used in place of the word union representing a local organization of journeymen within a single trade. In the 1830’s the term trade union came in use, then later national and international which meant representing members in more than one country. Terms such as trade assemblies and central labor unions came in the 1860’s. The first permanent labor organization was founded when journeymen shoemakers of Philadelphia joined forces...
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...without pharmaceutical companies hindering the market entry of its generic counterparts. Generic medication gives consumers a choice to spend more or to spend less for their health care, and in the long-run gives them a choice for a more cost-effective livelihood. Without the options of choosing a cheaper form of medication, consumers are being taken advantage of. This leaves no room for choice and thwarts fair market competition. With a 22% increase of profits in comparison to the previous year, it is quite obvious that this brand- name manufacturer and generic companies have disobeyed federal antitrust laws. Therefore the Federal Trade Commission is performing an investigation to ascertain if brand name companies and generic drug makers have acquiesced the stymie of generic competition, which leads us to our first question. Why would the drug maker want to stymie generic competition? Antitrust Laws such as the Sherman Act, Federal Trade Commission Act, and the Clayton Act have been created in order to diminish...
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...CONTENT PREFACE …………………………………………………………………….…..…3 CHAPTER 1 Theoretical basics of mergers and acquisitions processes………..........5 1.1. The economic substance of M&A ………………………………………………5 1.2. Financing M&A…………………………………………………………………9 1.3. Valuation matters……………………………………………………………….11 1.4. M&A failure……………………………………………………………………13 CHAPTER 2 International M&A experience..............................................................16 2.2. The M&A practice in European countries…………………………………….16 2.3. The M&A experience in USA…………………………………………………22 CHAPTER 3 Mergers and acquisitions in Ukraine.....................................................32 3.2. Legislature of Ukraine in the sphere of M&A………………………………...32 3.3. M&A of Ukrainian corporations…………………………………………........33 3.4. M&A of Ukrainian banks……………………………………………………..40 CONCLUSION...........................................................................................................46 REFERENCES...........................….………………………………………………...48 PREFACE Strategic factor in the success of companies on global markets and increasing international competitiveness is the growth their market value. Current global trends show an increasing relevance of financial management, which deals with the dynamics of cost and capital structure of companies, institutions of financial flows. Achieve business objectives may be able through...
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...FUNDAMENTALS OF BUSINESS LAW & ETHICS INTRODUCTION TO CONTRACTS What is the definition of a contract? a promise that the law will enforce 4 Parts of a Contract Agreement: one party must make a valid offer, and the other party must accept it. Consideration: there has to be bargaining that leads to an exchange between the parties. Legality: the contract must be for a lawful purpose. Capacity: the parties must be adults of sound mind. Describe the various types of contracts. bilateral: BOTH parties make a promise. This is the most common and is used for services, sale of goods and almost anything else. A promise for a promise... unilateral: ONE party makes a promise the the other party can accept only by doing something. This is a less common contract. express: In an express contract the two parties explicitly state all important terms of their agreement. This is the majority of contracts. implied: In an implied contract, the words and conduct of the parties indicate the intended agreement. This is less common. executory: one or more parties has not fulfilled obligations executed: all parties have fulfilled their obligations valid: satisfies all of the law's requirements unenforceable agreement: the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it voidable: the law permits one party to terminate the agreement void agreement: neither party can enforce, usually because the purpose of the deal is illegal or...
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...CHAPTER 10 MARKET POWER: MONOPOLY AND MONOPSONY R.KANAKARAJU 215112019 A.GOUTHAM SAI 215112020 B.R.PRADHEEP 215112027 M.PRABHAKAR 215112058 K.ADITHYA 215112063 NAGENDRA 215112069 MARKET POWERS: MONOPOLIST AND MANOPSONIST Markets comprises of products or services, buyers and sellers. Where as in a perfectly competitive market there will be a reasonably good number of buyers and sellers of the products or services. So the possibility of influencing the market by a single seller or buyer is nil. Depending upon the supply and demand prices will be determined. Market price and demand is the deciding factor of the companies to estimate how much to produce and sell, in consumers view it is a deciding factor how much to buy. In contrary to the case which was discussed above, if the market is not a perfectly competitive market then the situations of monopoly and monopsony arise. Monopoly market is the one which has only one seller but so many buyers. Monopsony market is the one which has only one buyer and so many sellers. Monopolist is the sole producer of a product, in market demand curve, price is determined by the quantity which is offered by the monopolist to sell, the quantity of produce sold by monopolist is low and the price is high, it happens because his products has full demand and he wants to take full advantage in this situation. Normally if the price is high, only a few buyers which have the potential to buy those...
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...Coach, Inc. About Coach, Inc Coach, Inc in New York, NY is the most recognized luxury American brand manufacturing women’s handbags and purses. It was established as a family-run workshop in 1941 and incorporated in Maryland (Manta). The SIC Code is 3171, and the NAICS Code is 316992. Besides women's handbags and purses, it also produces women's accessories, travel bags, outwear, personal leather goods, apparels, belts, scarves, and men’s business cases, wallets, and purses. In 2010, Coach, Inc. employed approximately 13,000 people and had an estimated annual revenue of $3,230,468,000 (Coach, Inc. 10K, 2010). Although Coach does have men’s handbags and so many products, it mostly concentrates on women’s handbags and purses. Another marketing strategy is that Coach focus on women, not teenager girls. The luxury brand tends to market to high income, professional females. The older females also show higher brand loyalty. International market Coach has 463 stores in the United States and Canada, 161 stores in Japan, and 41 stores in China. Coach also has stores in over 20 countries including South Korea, Taiwan, Singapore, Malaysia, Indonesia, India, Thailand, Vietnam, Mexico, Bahamas, Saudi Arabia, UAE, Bahrain, Greece, France, Russia, New Zealand and Australia. As of 2010, Coach’s total net sales were $3,607,636,000. Net sales in Japan were $720,860,000, which was approximately 20% of the total net sales. In the other international market, the net sales were $352,404...
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...1. What are the characteristics of a perfectly competitive market? What are the implications for accounting profit in a perfectly competitive market? What about economic profit? Perfectly competitive markets are characterized by low sunk costs, perfect information, no entry or exit costs, no search costs, identical products and an infinite numbers of sellers. In a perfectly competitive market there are many firms and many buyers, all of which are price takers, meaning they have no control over prices. As price takers, firms face a highly (perfectly) elastic demand curve, meaning that they can only change revenue by changing the quantity produced. Firms in a perfectly competitive market will produce where MR = MC. Since firms are price takers, MR = Price. As a result, when marginal cost is equal to marginal revenue, it is also equal to price. If firms are realizing positive economic profits, other firms with similar cost structures will have an incentive to enter the market: one competitive firm’s economic profits indicate that production of that good is more profitable than any other available allocation of resources, causing other firms to invest. Once new firms enter the market, there is an increase in the MARKET, or AGGREGATE supply which will change the price that individual firms face, causing a reduction in the price. Firms will enter until economic profits are zero, at which point the intersection of the price and the marginal cost intersects the minimum of...
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... |4 | |THE ACCOUNTING METHODS |7 | | VALUATION |8 | | TYPES OF MERGERS |9 | |WHY MERGERS |12 | |STATUTORY REGULATIONS |13 | |COMPARISON OF MERGERS IN INDIA AND CHINA |16 | |ARCELLOR MITTAL DEAL |17 | |DAIMLER CHRYSLER DEAL |19 | |REFERNCE |22 | ABSTRACT Mergers and acquisitions are on the rise today. It is used as a strategy for diversifying risk by some companies, and to combat competition or gain market share and the like by the others. In this paper...
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...CHAPTER 10 PERFECT COMPETITION Assumptions of Perfect Competition The most competitive market structure is pure or perfect competition, which is as competitive as possible. As previously mentioned, market structures are models that summarize how certain markets are organized and behave. For each market structure we have a set of assumptions or characteristics that tell us what kind of industries the model will explain. Only industries that meet the assumptions will behave in the way the model predicts. The assumptions of perfect competition are: Many buyers and sellers: There are so many buyers and sellers in perfect competition that no one of them has any influence whatsoever on the market. The number of consumers and producers is so great that any one of them is like a cup of water in the ocean – their presence or absence makes no difference at all to the market. Identical or homogenous product: Every producer in the market makes exactly the same product – consumers are not able to distinguish between the output of one firm and the output of another. There are no labels, brands or any other distinguishing features used to make a product look distinct. Excellent information: Both buyers and sellers in this market have good information about the product, especially the fact that there are many other producers all making the same product. Relatively free entry and exit: Firms are able to move resources in and...
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...68 3 LEARNING OBJECTIVES After reading this chapter you should be able to: LO1 Scanning the Marketing Environment WEB 2.0 IS ALL ABOUT YOU! The Web is changing at an extraordinary pace and each new change provides more customization and convenience for you. If you use Myspace. com, Del.icio.us, Secondlife, or any one of hundreds of new products on the Web you are already part of the new world of the Web! Not long ago the Web simply provided a modern channel for traditional businesses. Music led the way with file-sharing services such as Napster and eventually online stores such as iTunes. The entire entertainment industry followed by offering books, movies, television, radio, and photography on the Web. The digital revolution allowed all of these businesses to benefit from the technical aspects of the Web. Now the term Web 2.0 is used to describe the changes in the World Wide Web that reflect the growing interest in collaboration, open sharing of information, and customer control. Many products and services such as podcasts, weblogs, videologs, social networking, bookmarking, wikis, folksonomy, and RSS feeds are already available, and many more are in development. As the focus moves from providing a new channel for existing businesses to empowering individual consumers with customized products, suddenly the Web is all about you! You can create your own video and post it on YouTube, sell your photos on iStockphoto, build a social networking site on Ning, and publish...
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