Which Of The Following Statements Is True About Tying Agreements
Firstly, a comparison of the basic principles of US and EU fixing legislation suggests that Community legislation is, in many respects, much closer to the first American cases in the context of the approach itself than to the more recent American cases since Jefferson Parish. One exception is the Community assessment of market power, which is more closely linked to the modified approach itself. But this reflects more the use of a different political instrument than the particular anti-link policy. 4. OBJECTIVE JUSTIFICATION In principle, dominant companies accused of abusive links can strengthen the defence of objective justifications. However, in practice, there is not yet an example of a successful defence. For example, Hilti argued that the attachment of the sale of her nail guns to the sale of her nails had enhanced the safety and reliability of the entire fastening system. The Commission rejected Hilti`s justification for a number of reasons which focused mainly on security-related aspects: however, a comparison between US and EU competition law faces a significant disadvantage, namely that the European Commission and the European Court of Justice have dealt with the link in a very small number of cases, none of which is particularly recent. Napier Brown/British Sugar77 The case follows a complaint by Napier Brown, a uk sugar seller, that British Sugar, the UK`s largest sugar producer and seller, was abusing its dominant position to market Napier Brown outside the UK sugar retail market. In the ensuing proceedings, the Commission notably objected to British Sugar`s practice of offering sugar only at delivered prices, so that the supply of sugar was in fact linked to sugar delivery services. Suppose, for example, that a company that sells two goods, A and B, has a monopoly position in the product A market, but is exposed (in fact or potentially) to competition (real or potential) in the product market B. Let us also assume that the requirements for products A and B are independent, so that the quantity sold is independent of the other`s price.
If the monopoly in market A binds its two products, it would effectively link its sales of product A to the sale of product B. As a result, its incentive to lease B aggressively would be greatly increased. The commitment would therefore result in lower prices for Product B. It would also lead to a drop in profits in the market for this product. The profits of the monopoly and its competitors on the sale of product B would decrease, but the impact on them would be much greater. Indeed, the commitment would allow the monopoly to monopolize the sales of its competitors, which would make them less efficient competitors in the presence of economies of scale in production. Reducing profits may encourage monopoly competitors to exit the product B market or not to enter the market if they were potential competitors. In these cases, the commitment could both increase the benefits of the monopoly and harm consumers. In practice, the key questions should be whether the company has significant market power in the engagement market and is subject to imperfect competition – a small number of firms and barriers to entry – into the related market.154 Otherwise, an anti-competitive link is not plausible. Since the probability and cost of a false acquittal is low, why take the risk of a false conviction! Can`t be overly subjective that would otherwise exclude qualified….. In this regard, it is very difficult to determine whether the threshold for objective justification is particularly high or whether, in the rare cases examined, the justification relied upon by the dominant undertakings has simply not been supported by facts.