Problem:
Antitrust laws were essentially created to stop businesses that got too large from blocking competition and abusing their power. Mergers and monopolies can limit the choices offered to consumers because smaller businesses are not usually able to compete. Although free and open competition ensures lower prices and new and better products, it has the potential to significantly limit market diversity.
Look at the 2 examples below of how mergers and acquisitions have affected the way in which companies do business.
Read each of the 2 examples below. Decide which one you would like to use for this project and prepare an APA formatted research paper that responds to the aligned questions. Specifically, this paper must:
1) Identify the two firms with similar problems from different countries
2) Conduct a comparative analysis of the firms
3) Analyze political, social, ethical and legal differences and their impact on management decision making
4) Provide substantive conclusion and recommendations
Example 1:
Federal antitrust enforcers are investigating whether a multinational pharmaceutical company has attempted to minimize the impact of generic competition to one of its most profitable prescription drugs. This anti-depressant drug is the company's best seller, with sales last year of $2.11 billion, representing a 22% increase from the year before.
The Federal Trade Commission (FTC) is conducting an investigation to determine whether the company has engaged in activities to prevent generic alternatives to the prescription drug from entering the market. Specifically, the FTC is challenging a practice among brand-name and generic-drug manufacturers to agree to delay the introduction of the lower priced generic drugs to the market.
Answer the following questions:
Why would the drug maker want to stymie generic competition? Explain.
What types of legal barriers to market entry exist?
What are the possible ethical dilemmas present in this example?
Example 2:
The boards of 2 major telecommunications companies recently agreed to a $16 billion-dollar merger that would create the world's largest telecommunications company in the world. Although some agree that the synergy between these companies could be dynamic, others feel consumers could ultimately pay the price for the merger depending on which company becomes dominant in the various service areas.
Answer the following questions:
Why do you think consumer advocates have expressed concern over such merger possibilities?
Other than pricing, what are some pitfalls that consumers might have to deal with when 2 major companies merge?
What are the possible ethical dilemmas present in this example?