When we are antitrust, what is the opposite?

The European Parliament 27th overwhelmingly voted in favour of EU regulators considering splitting Google.

There were 384 votes and 174 votes against the vote, and the European Parliament adopted an absolute majority. The agreement strongly calls on the European Commission to consider stripping Google's search engine business in the event of an ineffective action to enforce antitrust rules.

In the late 19th century, the development of the world economy entered the period of monopoly capitalism, and anti-monopoly became the object of the regulation of all countries, and all countries adopted strict legislation to regulate and enforce anti-monopoly laws.

Although in recent years a variety of antitrust litigation, antitrust involved in the company's coverage is also more and more extensive, but for the general people, antitrust seems to be very remote. Many times, people just hear the news and know that the antitrust companies are very bullish, but it is not clear why they should be anti-trust.

The starting point of anti-monopoly is actually very simple, that is, to prevent monopolistic companies from using monopolistic advantages to harm market competition. It should be noted here that the monopoly of the company itself is not wrong, wrong is improper use of monopolistic advantage. When one or more companies are big enough to control the entire industry, the company becomes a monopoly. The anti-monopoly law itself and the monopoly of this natural effort are not sanctioned.

In general, there are some typical ways to abuse monopolistic advantages: Manipulating market prices, bundling sales (promotion), and restricting competition to exclusive agreements. Let's take a look at some examples below.

Manipulating market prices:

Because monopolistic companies have a large share of the market, these companies often have market pricing power. General Economics argues that the price of consumer goods is falling in full competition. But if some companies make profit by forcing or conspiring to achieve a price union to ensure high profit margins, the normal competition will not continue, and consumer interests are threatened. In general, the manipulation of market prices is jointly achieved by industry companies, because as long as one major player does not join the price union, the balance is broken.

In recent years, the most famous case of manipulating market prices has been the case of Apple manipulating e-book prices and the market price of major display manufacturers manipulating displays.

Apple, manipulating E-book prices

Recently, about Apple's alleged manipulation of e-book prices, in violation of the Sherman Act (one of the basic laws of anti-monopoly), Denise Cote, a judge at the Federal District Court in Manhattan, New York, has finally approved a settlement agreement signed between Apple and the plaintiff, which will pay a total of USD 450 million ( About 2.756 billion yuan).

Apple and five publishers were sued by the US government in April 2012, saying Apple had prompted publishers to sign an agreement to sell e-books in accordance with a pricing model that would increase the price of most e-books. Apple reached a deal with big publishers in January 2010, allowing publishers to set higher prices for bestsellers and new books, raising the best-selling book from $9.99 trillion to $12.99 and 14.99, and Apple getting 30%. It also pointed out that Apple's attempt to force the largest e-book seller, Amazon, to adjust the price of e-books has seriously undermined consumer interests. Local prosecutors and lawyers in 33 U.S. states filed a class-action lawsuit against the verdict last year when Judge Kurt ruled that Apple manipulated the price of digital books. If convicted, Apple faces a fine of 840 million dollars (about 5.144 billion yuan). The big ticket to the Apple in June this year, announced a settlement agreement, and agreed to pay 450 million of dollars in compensation.

China and EU open huge antitrust fines for Samsung Electronics

January 2013, China for international companies suspected of industry monopoly to open the first amount to 353 million yuan of the anti-monopoly ticket. Involving companies including Samsung, LG and China's Taiwan region, Chi Mei, Friends Tatsu, Chinese-ying, Han-yu, such as six international large-scale panel manufacturers, mainly because of the monopoly of LCD panel prices.

Samsung was also punished repeatedly in the US and Europe for allegedly monopolizing the country. In 2012 the European Union imposed a fine of 1.47 billion euros on six companies, such as Samsung and LG, because the 6 companies formed a price alliance in the area of television and display cathode ray tubes and monopolized the market for 10 years.

According to data, these display companies often use mail, tripartite meetings and even golf and other formal and informal occasions to negotiate display prices. Their behavior has made the display company gain a high profit, but hurt the interests of consumers.

Bundled Sales (Promotion)

Monopolies tend to have huge customer bases that other companies do not have at all, making it much easier for them to promote new products than other companies. And in many cases, monopolistic companies in order to gain the competitive advantage of new products, will be forced to bundle or free their own products to their original consumers to achieve the intent of the strong promotion. What's more, they often drag the competition company to their own advantage through almost unlimited resources. In order to protect competition, bundling is often a case of antitrust cases.

Microsoft resists huge fines to continue bundling

The European Union, which sued Microsoft for violating antitrust laws as early as 1998, found that Microsoft used the market dominance of desktop terminals to monopolize the entire European server market. They then issued a warning to Microsoft, but Microsoft turned a deaf ear and continued to abuse its dominance of its computer operating system, selling Windows version of the bundled media player software in Europe in March 2004 because Microsoft refused to divest its Windows operating system of Media Player (MediaPlayer) software, The European Commission fined Microsoft 497 million euros.

The European Commission fined Microsoft 899 million euros in 2008 for Microsoft's failure to comply with the European Union's orders issued in 04. 2008, the European Union against Microsoft in its Windows operating system bundled with its Internet Explorer for antitrust investigation. In 2009, Microsoft and the European Union agreed on a 2008 survey of browser selection, offering to allow users access to competitors ' products. In 2012, according to Microsoft's appeal, the European Union's second Supreme Court lowered the 2008 fine from € 899 million to € 860 million. 2013, the anti-misconduct competition regulator was fined € 561 million for Microsoft's failure to comply with its 2009 promise of Web browser selection. Microsoft has fined more than 1.6 billion euros for its 10-year antitrust case in the European Union.

Microsoft also received 30 million dollars in fines for software bundled with Media Player and media server in the Windows operating system.

While Microsoft has been fined for bundling browsers and playback software, Microsoft has not given up on its practices because it has worked well. Netscape, the inventor of the browser, was early due to the disappearance of Microsoft's bundle, and the real company, once rage network media transmission and formatting standards, was also moribund. Microsoft, through its monopoly advantage to promote media players and browsers, in the product itself is not absolutely competitive in the case, still become the industry's main players.

Google, I have an entrance.

Now most people get to the site through search engines, and Android has been installed in 90% of the smart machine. At this time, the access to the Google can be through the Super Flow portal to carry out a variety of their own product promotion.

On November 30, 2010, the European Union launched an investigation into the alleged monopoly of Google's alleged misuse of its advantages. The survey focused on whether Google was manipulating search results in its search business, crowding out rivals and putting its own links to rivals. Whether or not to force their partners not to promote their competitors advertising.

As the 2013 survey drew to a close, a joint in Europe, including Nokia and Microsoft, sued Google for allegedly monopolizing Android, suing Google for "using the Android system in a fraudulent manner to build an advantage for key applications running on 70% of smartphones shipped around the world". For example: forcing some mobile phones using Android to place Google's app products in a prominent position.

The European Parliament is preparing to split Google in a recent antitrust move against Google. Demand that Google's search services and other business services be separated, in order to achieve a fair competition between Google and its competitors.

It was reported in March this year that Google faces a 5 billion dollar fine in India over alleged misuse of its search service.

Exclusive agreements to restrict competition

Exclusivity agreements are actually very common in business. We often see a certain company and a certain company to reach strategic cooperation generally have some exclusive terms. However, because monopolies themselves have market advantages, their exclusive provisions may make the entire industry other companies completely lose competitiveness, and thus become a single large, so it is often the object of antitrust sanctions.

Intel restricts PC makers to 1.06 billion euros for using AMD chips

The European Commission began a survey of Intel in 2001, which found that Intel had signed agreements with the US PC maker Dell, Hewlett-Packard, NEC, China Lenovo Group and German retailer media Saturn to offer substantial discounts, These companies are not allowed to sell or produce products equipped with AMD's semiconductor components, thus preventing Intel's rival AMD from providing processors to these vendors.

The European Union provided evidence that, from October 2002 to November 2005, c manufacturers had used Intel processors in their desktops and laptops at a rate of not less than 80% per cent, and Intel offered kickbacks. In 2007, the D manufacturer's laptops were made with only Intel processors, and Intel offered rebates to them. (For related reasons, the name of the specific manufacturer is hidden)

The European Commission, after a 8-year investigation, imposed a fine of $1.06 billion (USD 1.44 billion) on Intel in 2009. In the same year Intel reached a settlement with AMD, and Intel agreed to give AMD a total of USD 1.25 billion for compensation, and Intel agreed to comply with a range of business practices. AMD has also withdrawn its national charges against Intel.

Intel appealed to the Permanent Court of the European Union in July 2012 to claim that the Commission relied on insufficient evidence to prosecute Intel, in the hope that it would be able to revoke or reduce its fines of € 1.06 billion (USD 1.44 billion). But the European Union's Permanent Court dismissed Intel's application in June this year. Upheld.

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Monopoly is based on production concentration and high development of capital concentration, a large enterprise or a small number of large enterprises to the corresponding departments of production and sales of monopoly or joint control can achieve a monopoly. Enterprises grow to a certain extent, in the corresponding industry has a certain dominant position, when the dominant position is abused, to the point of the alleged monopoly, it violates the principle of fair competition, the industry order is disrupted, it needs the government to intervene to maintain the benign competition in the market.

Once the enterprise has been found to be suspected of monopoly, it will face fines, imprisonment, compensation, civil sanctions, forced dissolution, split and other kinds of punishment. The most serious result of the anti-monopoly punishment is the at&t,1984 year at&t due to anti-monopoly punishment, was divided into eight, 1995 again active one divided into three, 2000 again split. It eventually led to the demise of the world's largest telecoms company.

Although faced with the high risk of antitrust penalties, but in the face of great interests, most of the mega-enterprises will more or less use their monopoly status.

On the other hand, there are more and more questions about the legitimacy of antitrust in recent years. Many industries have changed from "disruptive innovation" in small companies to new industries, rather than through simple competition. Traditional antitrust laws are generally limited to discussion in a small industry, and cannot take into consideration the cross-sectoral competition that is affecting development.

Although the current anti-monopoly law does not fully solve all the monopoly restrictions on competition. However, the existence of anti-monopoly law makes monopoly enterprises unable to do what they want, let them have scruples in doing evil, let new enterprises have more opportunities for development, its existence and implementation still has its very important positive significance.