What Makes Certain Practices Anti-Competitive Or Illegal?


A practice is anti-competitive or illegal if a company uses its market power to reduce or eliminate competition in the market, or to reduce or eliminate competition in a secondary market in which it does not have such power. A good example is smartphones and tablets. Today you can purchase a smartphone from one company and a tablet from another. Say that I make such great smartphones that 80 percent of buyers buy my smartphone, but my tablets are not terribly good and do not fare well when in competition with other manufacturers’ tablets. If I use my market power in the market for smartphones to force customers to buy my tablet too, when they would normally purchase the tablet elsewhere if given the choice, that is an example of an anti-competitive practice.


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