Anticompetitive actions are taken against a business due to its attempt to monopolize or try to manipulate the price of a product in the market. In the past, a company might have tried to monopolize certain market segments like the baby products, but today, when we observe such attempts, it is because the business owners are trying to give the consumers more choice. If the company succeeds in dominating a specific segment of the baby-products market, it may indeed be in violation of the law. In this situation, the Federal Trade Commission has the responsibility and power to protect the consumer from anti-competitive activities on the part of businesses.
Businesses that aim to dominate the baby products industry may do so by charging higher prices for the same quality items. This can drive customers away and result in the death of their desire to patronize that particular business. Even though the business is charging a higher price, the profit margin they receive from the transaction still has to be equal to or greater than the cost of production. Otherwise, they will be in violation of the law.
Which The Consumer Can Afford To Pay
Such monopoly situations reduce consumer choice and significantly affect the quality of products supplied by businesses. For example, the producers of baby shampoo may succeed in raising their price above that which the consumer can afford to pay. They will then turn around and sell the products at a higher price, thus reducing consumer benefit and forcing them to look for a new product. Likewise, the manufacturer of baby formula may increase the amount of sugar contained in their products, thereby compelling the consumers to buy even more. The end result is that consumers pay more for less and the manufacturer makes money even while providing less quality products.
In order to prevent such unfortunate scenarios, the Federal Trade Commission has an important role to play. Since the prices of many baby products are competitive already, increasing the price of one inherently would not have a major impact on overall profits. But if a company attempts to monopoly a segment of the market by charging too high a price, it can stifle competition. It is this type of activity that the FTC must monitor.
Violating The Law
If the company attempts to monopolize, the FTC can impose fines against the company or sue it for violating the law. If the company violates the law by unreasonably increasing prices, it can be forced to return to the market and make the price adjustments that are required to be made. Similarly, if it attempts to manipulate the prices that competitors can offer, it can be sanctioned. In other words, if a company attempts to gain an unfair advantage over its competitors by unreasonably limiting the amount of competition, it can be ordered to cease that practice and make the corrections that are necessary to make its products more competitive.
Monopoly is one of the most serious threats to the consumer. Companies can take advantage of the fact that some consumers will be willing to pay whatever it takes just to get their hands on baby products. The result can be a drastic reduction in the quality and variety of goods available, a higher price for the same good, and ultimately, a loss for the consumer. Monopolizing a particular industry can have long-term ramifications for the marketplace, and it can cost consumers a lot of money.
Anticompetitive behavior in the baby product market can occur when a company obtains sole rights to make a certain kind of baby product. This gives the company a monopoly over that market, giving it the ability to hike the price of the product in order to increase its profits at the expense of its competitors. In addition, a company can use market power to unfairly limit the distribution of competing baby products. For example, a manufacturer might try to keep baby shampoo off the market by extorting consumers in other ways.
Consumers should be wary of any company that attempts to monopolize the baby goods market. If a company does so, it can stifle competition, increase product prices, and even put a consumer at risk of being physically harmed.
A company needs to establish itself with a product that people want and then prove its legitimacy by offering quality products at a reasonable price. Additionally, the consumer needs to be provided with adequate information so that he/she can make an informed decision on whether or not to buy from a particular company.