types of efficiency
- static effeciency
- dynamic effeciency
what is static effeciency
- lower prices
- better quality
- more choice
what is dynamic effeciency
- efficient allocation of resources
- management and tech improvements
- product innovation
purpose of competition law
ensures that free market competition is maintained
what does egyptian competition forbid?
- anti-competitive agreements
- monopolistic competition
- abuse of dominance
what is market power?
ability of a firm/group to control prices and limit outputs
types of horizontal agreements
cartel
types of carterls
- price fixing
- market allocation
- bid rigging
- production, distribution, or market limitations
what is price fixing?
Cartel members agree to charge the same price for goods or services to eliminate price competition.
what is market allocation?
firms agree to split market among themselves so they don’t compete in each others sectors
what is bid rigging?
Members coordinate during a bidding process, ensuring one of them wins the contract
what are production, distribution, or market limitations?
agreements that limit the amount of products that can be produced or distributed or restrict where they can be solf
what is the relevant market?
market segment analyzed to determine competition
components of relevant market
- products/services seen as substitutes
- geographic locations where companies operate under similar conditions
- timeframe (duration of analysis)
types of geographic locations
- domestic
- national
- regional
- global
factors making cement cartel easier
- uniformity of the product
- small number of competitors
- transparency in the market
- direct contact between competitors
what is the e-leniency program?
online initiative to encourage businesses and individuals to come forward with information about cartels
what is a whistleblower?
the first person to report cartel, they file a detailed report and supporting evidence to cartel activity
they’re fully exempt from trouble by the law.
what is vertical agreement?
agreement between companies operating at different levels of the supply chain
what is a horizontal agreement?
agreement between companies that operate at the same level in the supply chain
what is rule of reason approach?
each case is assessed individually to decide if a business practice or agreement violates competition laws
criteria for assessment of rule of reason
- effect on competition
- benefit of agreement to consumers
- product reputation/safety
- compliance with agreement of customs
3 elements of dominance
- market share more than 25%
- the ability to affect the prices of product in market
- inability of competitors to stop them
forms of abuse of dominance
- any act that leads to complete or partial non-manufacturing or non-distribution for a certain period
- not engaging in buying or selling a product to someone, which limits their ability to enter or stay in the market
- acts that limit how a specific product is distributed among vertically connected businesses
- tie in agreements
- price discriminations
- withholding scarce products
- predatory pricing
- restricting supplier relations
