Is vertical price fixing illegal?
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Is vertical price fixing illegal?
Vertical price-fixing arrangements include agreements by manufacturers to set minimum or maximum resale (i.e., retail) prices for their products. Direct agreements to maintain resale prices are per se illegal in the United States and subject to “hard-core restriction” in Europe. …
Is price collusion illegal?
When competitors collude, prices are inflated and the customer is cheated. Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
Is monopoly illegal in the Philippines?
The role of competition in the private sector is recognized in the Philippine Constitution as a state policy. No combinations in restraint of trade or unfair competition shall be allowed.” This provision is a statement of public policy and does not necessarily prohibit monopolies per se.
What is IRR in the Philippines?
The Implementing Rules and Regulations (IRR) shall cover all the mandated functions and duties of the Philippine Competition Commission to facilitate the implementation of the provisions of Republic Act 10667, otherwise known as the Philippine Competition Act.
What is it called when two formerly separate firms combine to become a single firm?
A corporate merger occurs when two formerly separate firms combine to become a single firm. When one firm purchases another, it is called an acquisition.
What is the maximum value that can be reached using the HHI?
The HHI reaches a maximum value of 10,000 when a monopoly exists in which one firm has 100 percent of the market, that is, the HHI = (100)2 = 10,000. In contrast, the HHI takes on a very small value, theoretically approaching zero, in a purely compet- itive market in which there are many firms with small market shares.
What do you call the merger of several companies?
There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger.
What is the Herfindahl Hirschman Index used for?
The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration and is used to determine market competitiveness, often pre- and post-M&A transactions.
What is considered a high HHI?
The agencies generally consider markets in which the HHI is between 1,500 and 2,500 points to be moderately concentrated, and consider markets in which the HHI is in excess of 2,500 points to be highly concentrated.
What does a low HHI mean?
low degree of concentration
What does a high Herfindahl index mean?
Increases in the Herfindahl index generally indicate a decrease in competition and an increase of market power, whereas decreases indicate the opposite. Alternatively, if whole percentages are used, the index ranges from 0 to 10,000 “points”. For example, an index of . 25 is the same as 2,500 points.
What is a highly concentrated market?
Definition: Market concentration is used when smaller firms account for large percentage of the total market. The value of top firms or top ‘n’ firms may be three or maximum five. If the top firms keep on gaining market share, then we say that the industry has become highly concentrated.
Why is HHI a better measure of competitiveness over CR?
Market concentration can be measured in different ways, i.e. by using different indicators. In the broadest use are the concentration ratio (CR) and Herfindahl-Hirschman Index (HHI). It is believed that the Herfindahl-Hirschman Index is more precise measure because it takes into account all companies.
