The choice to purchase desired products and services from companies should always be left with consumers. However, some companies’ actions limit competition from others and enhance their monopoly in the market place. They tend to engage in bizarre business practices that aimat scaring away their potential competitors.In order to stop this trend, the government has since formulated appropriate laws and regulations to prevent such companies from gaining full control of the market. One such law is the antitrust lawthat was formulated in the 1890s to protect consumers by encouraging competition. This paper investigates two companies that breached the antitrust laws. The first company is the Time Warner Cable that is responsible for offering online video streaming services to its customers while the second is the Daiichi Ranbaxy Company that is a result of the merger between India’s Ranbaxy and Japan’s Sankyo.
The Time Warner Cable
This is a data cable company that supplies internet through video online streaming to users across the United States. However, this company is being accused of violating the antitrust laws by limiting the online video streaming without any valid reason. Through this, they restrain consumers from streaming the required amount of video in addition to deterring their migration to other competing bundle channels as well. Therefore, the consumers are not able to switch on to streaming video online. Additionally, the company only offers unrestricted data usage on condition that the customeruses Time Warner Cable’s own application for streaming the video. Although research points out to the fact that many consumers are embracing online videos gradually, the Time Warner Cable Company argues that its limitation to subscriptions perks and data is in reaction to the multiple devices that consumers use(Plunkett, 2009).
Reasons behind Time Warner Cable Company’s limitationof video online streaming
Customers are slowly abandoning the use DVDs and fast embracing the video streaming technology. This is attributable to the fact that video streaming uses fewer infrastructures making it have relatively less barriers for entry. As a result, the online video streaming market is increasing becoming flooded with new companies to satisfy the need. Therefore, there is more competition than before. In order to retain its customers, the Time Warner Cable Company is engaging in restraining them on the amount of online video streaming so that find it hard to migrate to other companies such as Redbox and Netflix.
Legal barriers to online video streaming
The federal and state governments have formulatedvarious laws and regulations that aim to regulate commerce and trade. These laws prevent such conducts as price fixing, unlawful limitations, and monopolies with an intention of promoting competition and the production and delivery of goods and services that are of high qualities(Posner, 2011). The main objective of these legal provisions is to safeguard the welfare of the public by making sure that consumers’ demand are met. Apparently,specific legal barriers within the constitution restrain the Time Warner Cable’s conducts. Some of the legal barriers are found in the Clayton Act of 1914 (15 U.S.C.A) and the Robinson-Patman Act of 1936 (15 U.S.C.A)(Posner, 2011).
Possible ethical dilemmas
The need to make profit and retain clients of the company normally takes precedence to any business organization. In order to achieve, a company needs to attract and retain as many customers as possible. However, some of the ways of retaining these customers are subject to legal violations of the law. In this respect, a company is at a loss on the best strategy to use to maximize its profits and at the same time follow the law.
Daiichi Ranbaxy Company
Daiichi Ranbaxy Company was a $4.6 billion merger deal between Daiichi Sankyo of Japan and India’s Ranbaxy. Japan’s Daiichi Sankyo that is a pharmaceutical company based in Tokyo intended to acquirea drug making company in order to take full advantage of their synergies in a hybrid business model. Additionally, the two companies had expectations of enhancing their competitiveness. Although this was good business move for the two merging companies, experts believe that it is not in the best interest of consumers(Paul, 2011).
Reasons why consumers are concerned with the merger
Consumers are not sure if they will benefit from the major of two competing companies. It is also not clear on the methods of service provision. This is in view of the fact that the two companies had their own different policies. Therefore, consumers are not aware of which policies that will take precedence. Incidentally, the Ranbaxy Company used to charge relatively service rates in the market. By merging it with the Daiichi Sankyo, consumers are afraid that the serve charges will go up.
Other pitfalls to deal with during mergers
It will take time for consumers of either of the two companies to come to terms with the new services that merged companies will offer. The consumers will again find it difficult to understand the new modes of operations and the new management. Additionally, merging companies often adhere to some new rules and regulations. Some of these rules might affectthe clients directly. When they are not used to the rules, they can shun away from the company. For the merging companies, they will have to struggle hard to adjust with limited service providers due to the few available options in the market than before.
Possible ethical dilemmas
Any two companies that merge normally present their respective customers with various ethical dilemmas. To begin with, most customers suffer when their preferred companies cease to offer certain services to them. Additionally, some other companies would be reluctant to surrender some of their rights that were responsible to satisfying their customer’s needs.
Paul, J. (2011). International Business. New Delhi: PHI Learning Pvt. Ltd.
Plunkett, J. W. (2009). Plunkett's Entertainment and Media Industry Almanac 2009 (E-Book):
Entertainment and Media Industry Market Research, Statistics, Trends and Leading Companies. Houston, Tex. : Plunkett Research, Ltd.
Posner, R. A. (2011). Antitrust Law, Second Edition. Chicago, Ill. [u.a.] : University of Chicago Press.