Describe the provision of the US Antirust Law invoked to judge presence of anticompetitive behavior or potential of for moving the industry in that direction.

Industrial Organization

Landmark Antitrust Case Study Assignment

Template posted on BB on June 9 and again June 10, 2015

Dr. Mozayeni Last Name ___________________ First Name ____________________

Assigned #:__________________________

I. Your assigned cases are posted on BB. Research your case, beginning with an easy source, such as Wikipedia, The Financial Times, Wall Street Journal, the Economist, and other similar sources. The use Lexus Nexus (the legal data base) for more details about the case.

II. Use the template below to report your research. Your grade will be determined by the overall quality of your research in conjunction with your analysis reported in item #8 below. Item #8 carries 40% of the weight for the grade of this assignment. The weight for items 1-7 is 60% of the grade.

1. Write a 100- word abstract of the case, including the date of the case.

2. Describe the provision of the US Antirust Law invoked to judge presence of anticompetitive behavior or potential of for moving the industry in that direction.

3. Describe the basis for the ruling and action that pertain to all OR some of the following factors:

4. The extent and trend in competition and expected in the future: Industry Structure and trend and projection for the future [based on the past, mostly]; CR4, CR8 and

5. HHI, specially in cases of mergers

– Market Structure

– The line of product[s] in question (cross elasticity of demand)

– The geographical domain of the product/firm and its relation to “monopolization” or “dominance”

– Trend in the firm’s profits

– Growth in “market power”

– Barrier to entry

6. Describe the “conduct” in question.

7. Non-price Strategies the defendant had used and describe how.

8. Describe the effect of the defendant’s “conduct” on other firms (or the main rival) in the industry.

9. Describe the initial legal action taken against or in-favor of the defendant.

10. Describe any subsequent legal action in the case (such as the Supreme Court), if any.

11. Carefully describe how the model of Structure-Conduct-Performance has been applied in the case under consideration. [The weight for this question is 40% of the grade.]

I also want you to go over this first page that I wrote because I had already submitted this to turn it in. I also want you to use this source which is called “the cellophane case and the new competition”

On December 13,1947, du Pont de Nemours & Company was charged with having monopolized, intended and intrigued to monopolize the manufacture and sale of cellophane and cellulose caps and bands in the United States in contravention of second section of the Sherman Act. It disallows certain business exercises that national government controllers regard to be anti-competitive, and requires the government to research and seek after trusts. The company’s case is consisted of two questions. The first questions is said to be “possession of monopoly powers” and the second questions is said to be “achievement of powers by ‘monopolizing’ within the meaning of the Act and under United States v. Aluminum Company of America’. The court found that du Pont led exploration to enhance production efficiency, to decrease expense of production, and to enhance the quality and grow new sorts of cellophane. It advanced the improvement and utilization of bundling machinery that could deal with both cellophane and other adaptable wrapping materials. Because of this it served to establish cellophane sales as well as prompted advancement in competing flexible wrapping materials. Beside these accusations, the services of the company is also significant defining the relation with the company itself and customers. It provided clients with technical administrations to help them fix issues caused by the utilization of cellophane. It grew more than fifty sorts of cellophane customized to fulfill wrapping needs of specific items. It considered the purchasing propensities for customers in general. It directed business studies to focus on the impact on deals of bundling an item in cellophane. It advanced deals by teaching potential cellophane clients to the sales of transparent wrapping material. It diminished costs to get into new and more extensive markets. It is offered by the author that this case can be investigated by a brief explanation of the criteria. It is also state that financial experts can focus on the presence of imposing business model and, second, an utilization of the applicable criteria to du Pont’s cellophane operations with an end goal to examine the investigation, has du Pont had absolute control in making and offering cellophane.

Stocking, G. W., & Mueller, W. F. (1955). The Cellophane Case and the New Competition. The American Economic Review, 45(1), 29-63. Retrieved from http://www.jstor.org/stable/1811582

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