Economics - Importance Of Competition In Markets - US Department of Justice Assignment Help

Internal Code : 3GEG

Economics Assignment Help

TASK

1. The US Department of Justice has recently announced that StarKist has agreed to plead guilty to a charge of price-fixing in relation to a conspiracy with officials from other tuna companies to fix the price of canned tuna that ran from at least late 2011 to late 2013 and came to light in 2015.  The company faces a potential fine of $100 million.  The canned tuna market in the US has long been dominated by the following three companies: StarKist, Chicken of the Sea and Bumble Bee.  Bumble Bee agreed to plead guilty in May 2017 and paid a fine of $25 million.  Chicken of the Sea has not been charged because prosecutors say the company exposed the scheme and co-operated with the investigation.

• Describe the facts of this case in relation to what the companies involved were doing to implement the anti-competitive scheme.
• Raw tuna is an input for the production of canned tuna.  Explain your expectation with respect to what the normal relationship should be between the price of raw tuna and the price of canned tuna.  Explain the relationship between the price of raw tuna and the price of canned tuna in this case and describe how this relationship played a role in the anti-competitive conspiracy being exposed.
• Describe how Merger & Acquisition activity among suppliers in this market impacted competition and played a role in the price-fixing activities being exposed.
• Describe how the collusion and price-fixing in this case impacted consumers in the US market.

2. The Australian Competition and Consumer Commission recently announced an inquiry into price competition among providers of foreign exchange services to consumers and small businesses.

• Describe how the cost of sending money overseas from Australia in relation to other G20 countries played a role in this inquiry being commenced.
• Identify the four largest banks in Australia and the three largest online money transfer companies and describe how complaints about these firms played a role in the inquiry being commenced.
• Describe generally how the inquiry will be conducted with specific reference to the range of issues to be addressed.

3. The European Union regulates Competition among suppliers to European consumers.  This competition policy is designed to apply rules to make sure companies compete fairly with each other.

• Describe the reasons why the EU has adopted these policies and the tools available to fight anti-competitive behavior.

4. In 2017, the European Commission imposed a €2.4 billion penalty after finding that Google had used its dominant search engine to skew the market in favor of its internet shopping service.  Google is appealing against this decision.

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