Unit 15 - Competition Law

Word

Definition

Example

cartel

a group of similar independent companies who agree to join together to control prices and limit competition

The authorities uncovered a cartel formed by several major oil companies to fix prices and control the petroleum market

merger

the joining together of two or more companies

The merger between the two telecom giants resulted in a more formidable competitor with expanded reach and resources

oligopoly

a market situation in which a small number of firms compete with each other

The smartphone industry is characterized by an oligopoly, with a few major players dominating the market and setting prices accordingly

monopoly

an organisation or group that has complete control of an area of business so that others have no share

The government imposed strict regulations to prevent any single company from attaining a monopoly in the telecommunications sector

competition law

Legal regulations and principles designed to promote fair competition and prevent anti-competitive practices in the marketplace

Competition law aims to ensure fair and open markets by prohibiting anticompetitive practices like price-fixing and abuse of dominance

anti-competitive

Actions, behaviors, or practices that go against the principles of fair competition and seek to hinder, distort, or manipulate market competition

The company's anti-competitive behavior, such as exclusive contracts with suppliers, raised concerns about fair market competition

single European market

A unified economic area in the European Union where goods, services, capital, and labor can move freely without barriers among member states

The single European market facilitates the free movement of goods, services, capital, and people within the European Union's member states

private undertaking

A non-governmental entity or organization, typically a business, that operates within the framework of competition law and market regulations

The company operated as a private undertaking, which limited its shareholder base to a select group and reduced public disclosure

antitrust

A term often used in the United States to refer to laws and regulations aimed at preventing monopolistic or anti-competitive behavior

The antitrust authorities launched an investigation into allegations of anticompetitive behavior by a dominant tech corporation

trust

A large business organization that controlled multiple companies and sought to monopolize markets; often subject to antitrust actions

In the late 19th century, trusts played a significant role in consolidating economic power and controlling various industries

trustbuster

A person or entity, often a government official, responsible for enforcing antitrust laws and breaking up trusts or monopolies

Theodore Roosevelt is often remembered as a trustbuster for his efforts to break up monopolistic trusts in the early 1900s

economic efficiency

The optimal allocation of resources and factors of production to maximize the production of goods and services, often a goal of competition law

Improving economic efficiency is a key goal of regulatory agencies, aiming to optimize resource allocation and benefit consumers

market economy

An economic system in which resources and prices are determined by supply and demand in a competitive market

A market economy relies on supply and demand forces, where prices are determined by the market rather than government intervention

relevant market

The specific market or industry in which a product or service competes, often defined based on factors like product type and geographic scope

Identifying the relevant market is crucial in competition law cases to define the scope of competition and potential antitrust violations

barriers to entry

Obstacles or impediments that make it difficult for new firms to enter and compete in a specific market or industry

High startup costs and regulatory hurdles are common barriers to entry that discourage new competitors from entering the market

penetrate the market

To successfully enter and establish a presence in a market, often by overcoming barriers to entry

The company's strategy was to penetrate the market by offering competitive prices and innovative products to attract new customers

price-fixing

An illegal practice where competing businesses conspire to set prices at a fixed, agreed-upon level, limiting competition

The investigation revealed that the major electronics manufacturers engaged in price-fixing, artificially inflating the cost of devices

parallel behaviour

The practice of competitors in a market following similar pricing, marketing, or business strategies, often raising concerns about collusion

Competitors engaging in parallel behaviour, such as mirroring each other's pricing, raised suspicions of collusion in the industry

abuse a dominant position

Exploitative actions by a dominant market player to restrict competition, often considered anti-competitive behavior

The dominant player in the search engine market was accused of abusing its position by favoring its own services in search results

predatory pricing

Setting prices below cost to drive competitors out of the market, often with the intent to later raise prices once competition is eliminated

The smaller startup accused the industry giant of predatory pricing, alleging that it intentionally undercut prices to eliminate competition

tie-in arrangements

Combining the sale of one product or service with another, often used to leverage market dominance or limit consumer choice

The company used tie-in arrangements, requiring customers to purchase one product to access another, effectively limiting choices

merger regulation

Legal rules and oversight related to the consolidation of companies through mergers and acquisitions to ensure fair competition

Merger regulation involves assessing whether proposed mergers and acquisitions might substantially lessen competition in the market

horizontal terms

Aspects of competition law and regulation that pertain to practices among firms operating at the same level of production or distribution within a market

The merger agreement included horizontal terms that governed the integration of two competing companies operating in the same market

vertical terms

Aspects of competition law and regulation that address practices between firms operating at different levels of production or distribution within a market

Vertical terms in this lease agreement specify the responsibilities of the landlord and tenant.

initiate proceedings

To formally start legal actions or proceedings, often referring to the commencement of legal actions related to competition law

The court granted permission to initiate proceedings for the case to move forward.

collude on prices

Illegally cooperating with competitors to fix or manipulate prices in a way that undermines market competition

The evidence showed that the competing firms colluded on prices, coordinating their pricing strategies to maintain higher profit margins

limit access

Actions or practices that restrict or deny entry to competitors in a market, often leading to anti-competitive concerns

The industry leader used exclusive contracts to limit access to critical suppliers, making it difficult for new entrants to compete

impose a fine

To levy a monetary penalty or sanction as a consequence for anti-competitive behavior or violations of competition law

To deter anti-competitive behavior, the antitrust agency decided to impose a significant fine on the company for its violations

anti-competitive behaviour

Actions, practices, or conduct that contravene competition law principles and harm or hinder market competition

Engaging in anti-competitive behaviour not only harms competitors but also stifles innovation and negatively impacts consumers

bid-rigging

Collusive actions where competitors coordinate bids on contracts or auctions to manipulate prices or outcomes

The construction companies involved in bid-rigging schemes artificially inflated project costs, resulting in financial losses for taxpayers

per se violation

A type of anti-competitive behavior or practice that is considered illegal without the need for further analysis or proof of harm

Some antitrust violations are considered per se violations, meaning they are inherently anti-competitive and do not require further proof

territorial allocation

An anti-competitive practice where competitors divide markets or territories among themselves to limit competition

The companies engaged in territorial allocation, agreeing not to compete with each other in specific geographic regions to maintain prices

Let me caution you that

An expression used to advise or warn someone about a potential issue or concern in a diplomatic manner

Let me caution you that making hasty decisions without considering all the facts could be detrimental

I must warn you that

A phrase used to convey a sense of caution or forewarning when discussing a potential matter or challenge

I must warn you that investing in this venture carries significant risks that you should be aware of

You should be aware that

A statement used to bring attention to or inform someone about a particular fact, situation, or circumstance

You should be aware that the benefits of the new software solution extend beyond just cost savings

benefits of the solution

The positive outcomes, advantages, or improvements that are expected to result from implementing a proposed solution

The benefits of the solution include increased efficiency, reduced errors, and improved customer service

proposed solution

A recommended course of action or strategy intended to address and resolve a specific problem or challenge

Our proposed solution to the problem involves streamlining internal processes and enhancing communication

reason for writing

The purpose or motivation behind writing a communication, often explained in the introductory portion of a message or document

The reason for writing this report is to provide a comprehensive analysis of the recent market developments

implementation of the solution

The process of putting a proposed solution or plan into action to address a problem or achieve a desired outcome

Implementation of the solution requires close collaboration between the IT and marketing teams

description of the problem

An explanation or account of the specific issue or challenge that needs to be addressed or resolved

The description of the problem highlighted several operational inefficiencies that need immediate attention