Market, Competition And Regulation The Essay

Length: 8 pages Sources: 6 Subject: Business Type: Essay Paper: #65812053 Related Topics: Antitrust Practices, Antitrust, Monopoly, Ibm
Excerpt from Essay :

Of course, this is a good thing for customers on short-term, but is negatively affects other companies on the market. This is because smaller competitors and especially those that intend to enter the market addressed by IBM find it at least difficult to provide product prices in accordance with those provided by IBM. These smaller companies do not have the ability of reducing their production or operating costs, which does not allow them to introduce competitive prices on the market. This way, they are clearly disfavored by IBM's position and market power.

In addition to this, in a field like it, it is imperative to make continuous investments into the research and development activity. This requires significant capital amounts from these companies. The investment levels that IBM reaches cannot be reached by many of these companies. This makes it difficult for these companies to keep up with IBM and its products and services. IBM is moist of the times at least one step ahead of its competitors because of its capacity of investing large amounts of capital in innovation of products and services that create new needs of customers.

Also, technological developments have become extremely important for all business sectors, but they are mostly important in the it sector. IBM has almost become a synonym with technological development. In other words, the company establishes very high technological standards that must be met by competitors too in order for them to maintain their competitiveness on the market. While these competitors must invest important financial resources into these technological development, instead of focusing on other areas, IBM is able to maintain its focus on reducing production costs that its competitors cannot do.

In addition to these barriers that derive naturally from the strong position and market power of IBM, the company is accused of implementing a series of actions and activities intended to limit its competitors' activity on the markets addressed by IBM. The European Commission investigates the fact that IBM has apparently used its dominant position on the market in order to limit or deny the access of certain competitors to spare parts that IBM is the only source for. This way, IBM intended to keep some of its competitors from addressing the market (O'Gara, 2010).

IBM is also under the investigation of the Justice Department in the U.S. The company is accused of antitrust activities, mainly of preventing its competitors of purchasing certain types of software...

...

IBM has denied the accusations (Koppel, 2009). As mentioned above, IBM is the subject of two European Commission investigations, which means that the company has engaged in several anticompetitive activities (Kawamoto, 2010).

Conclusions

The market conditions that international institutions want to be met by companies addressing these markets become more and more often the object of investigations of companies that have not respected the regulations of these markets. One of these examples is represented by IBM and its anticompetitive practices in the U.S. And in the EU space. The company is investigated for engaging in anticompetitive behavior that affects the activity of companies in the it market.

The market power that IBM benefits from allows the company to raise a series of barriers that derive naturally from this position on the market, like reduced production costs, low levels of prices, economies of scale, technology developments, capital requirements, and others. In addition to this, IBM is accused of using its position as a supplier in this market in order to restrict or deny the access of certain competitors to the products and services provided by the company.

Based on the facts presented by the press in the U.S. And in Europe, it seems that the authorities have made the correct decision regarding the investigation on IBM. Even more, these facts are backed by the legal environment in these areas. Although the complaints that refer to anticompetitive practices have been linked with Microsoft, there are several companies that complained about IBM's activity and that made proof of the company's anticompetitive behavior.

From the fact presented to the public, it is clear that IBM engaged in activities that prevented its competitors to purchase certain products and services that IBM is the provider of. This is against regulations regarding competition, given the fact that such activities clearly interfere with the equal opportunities that all companies in the it market should benefit from. Therefore, the European Commission made the right decision about investigating the activities of IBM that led to the complaints of several companies.

Reference list:

1. Oates, J. (2009). IBM Faces EU Monopoly Probe. Enterprise. Retrieved November 14, 2010 from http://www.channelregister.co.uk/2009/01/20/ibm_eu_probe/.

2. Annual Report (2010). IBM. Retrieved November 15, 2010 from http://www.sec.gov/Archives/edgar/data/51143/000104746910001151/a2195966z10-k.htm.

3. Monopoly: A Brief Introduction (2006). Linux Information Project. Retrieved November 15, 2010 from http://www.linfo.org/monopoly.html.

4. O'Gara, M. (2010). EC Opens Two Antitrust Investigations of IBM. Retrieved November 15, 2010 from http://soa.sys-con.com/node/1478919.

5. Koppel, N. (2009). Justice Department Launches Antitrust Investigation of IBM. The Wall Street Journal. Retrieved November 15, 2010 from http://blogs.wsj.com/law/2009/10/08/justice-department-launches-antitrust-investigation-of-ibm/.

6. Kawamoto, D. (2010). Europe Launches Two Antitrust Investigations into IBM. Daily Finance. Retrieved November 15, 2010 from http://www.dailyfinance.com/story/company-news/eu-ibm-antitrust-investigations/19568359/.

Sources Used in Documents:

Reference list:

1. Oates, J. (2009). IBM Faces EU Monopoly Probe. Enterprise. Retrieved November 14, 2010 from http://www.channelregister.co.uk/2009/01/20/ibm_eu_probe/.

2. Annual Report (2010). IBM. Retrieved November 15, 2010 from http://www.sec.gov/Archives/edgar/data/51143/000104746910001151/a2195966z10-k.htm.

3. Monopoly: A Brief Introduction (2006). Linux Information Project. Retrieved November 15, 2010 from http://www.linfo.org/monopoly.html.

4. O'Gara, M. (2010). EC Opens Two Antitrust Investigations of IBM. Retrieved November 15, 2010 from http://soa.sys-con.com/node/1478919.
5. Koppel, N. (2009). Justice Department Launches Antitrust Investigation of IBM. The Wall Street Journal. Retrieved November 15, 2010 from http://blogs.wsj.com/law/2009/10/08/justice-department-launches-antitrust-investigation-of-ibm/.
6. Kawamoto, D. (2010). Europe Launches Two Antitrust Investigations into IBM. Daily Finance. Retrieved November 15, 2010 from http://www.dailyfinance.com/story/company-news/eu-ibm-antitrust-investigations/19568359/.


Cite this Document:

"Market Competition And Regulation The" (2010, November 15) Retrieved December 9, 2021, from
https://www.paperdue.com/essay/market-competition-and-regulation-the-6694

"Market Competition And Regulation The" 15 November 2010. Web.9 December. 2021. <
https://www.paperdue.com/essay/market-competition-and-regulation-the-6694>

"Market Competition And Regulation The", 15 November 2010, Accessed.9 December. 2021,
https://www.paperdue.com/essay/market-competition-and-regulation-the-6694

Related Documents
Competition Regulation and Competition: An
Words: 1022 Length: 3 Pages Topic: Economics Paper #: 86095602

In this case, the average total cost will continue to decline as the scale of production increase, because fixed (or overhead) costs are being spread over higher and higher levels of output" (Natural monopoly, 2010, Tutor2U). According to economic theory, it is efficient to allow for a natural monopoly because competition would require too large of a diversion of available resources for a competitor. When natural monopolies exist, they

Regulation of Mergers Government Regulation of Mergers
Words: 1453 Length: 4 Pages Topic: Economics Paper #: 21023654

Regulation of Mergers Government regulation of mergers and expansion in the smartphone operating systems market primarily protects consumers and encourages free market competition. There are antitrust laws that protect wireless consumers and promote competition against monopolistic practices. Simply put government regulation is needed to allow more competitors to enter the market. Therefore offering consumers more innovative smartphone operating system choices and options. Another advantage of regulation is to ensure pricing of products is

Competition Orthodox Economic Thought Holds
Words: 1479 Length: 5 Pages Topic: Economics Paper #: 5565969

Competition in these markets, therefore, is unlikely to be on the basis of product innovation. Service innovation is possible to some degree with the Internet, but there are only so many ways to deliver insurance -- it is a product centuries old and not subject to much innovation. In a market like this, service and price are two methods of gaining competitive advantage. Private insurance firms use proprietary actuarial

Regulation of Labour Market the
Words: 2542 Length: 7 Pages Topic: Careers Paper #: 97830211

This situation once again proves that the people are not considered valuable additions, but commodities. And the management of these commodities changes based on business needs. In terms of the younger employees, their careers -- or their end thereof -- are extremely intensely subjected to the evolution of technology. As a parenthesis, the advent of technology has imposed new standards for the employees in the meaning that they must progress

Market Concentration and Health Care Economics
Words: 968 Length: 3 Pages Topic: Healthcare Paper #: 92596249

Market concentration is the concept that allows different distributions of the shares of various companies’ production within a market. In other words, it is a measure of monopolistic phenomena that helps one to determine the extent to which a single firm has control or dominance within a market. Market power is the extension of this phenomenon and describes the ability of a company to raise prices as a result of

Managerial Decision Making and Market Structure
Words: 1532 Length: 5 Pages Topic: Economics - Macroeconomics Paper #: 94174272

Market Structure and Managerial Decision Making The objective of this paper is to discuss the concept game theory in the competitive market environment where there are two or more firms competing against one another. The paper cites the examples of Nash equilibrium, prisoner dilemma, and dominant strategy. Moreover, the paper discusses the theory of perfect competition, monopoly, monopolistic market and theory of oligopoly. (Bhat, and Rau, 2008). Game Theory The game theory is