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GE and the Honeywell. Argument For And Against The Commission Decision. - Essay Example
Author : jarvis75
Finance & Accounting
Pages 12 (3012 words)
The Commission opined that the merging of the EG and Honeywell would enable the entity to partake in more coercive forms of bundling, which would effectively deprive the consumers of choice. …
According to Pfanz (2001), the categories of bundling might have included pure and mixed. Indeed, as the paper progresses it would be simpler to deduce the category. The Commission suggested that the bundling technique would have many pleasant effects on the merged GE and Honeywell’s competitors in the markets for aerospace equipment and jet engines. This is because the rivals’ market shares would be eroded by their incapability to compete with the joined entity package deals, which in turn would lower the profitability of their rivals leading to their exit (Schlossberg & American Bar Association. Section of Antitrust Law 2008, p. 17).
The Commission thought that the ability of the company to employ bundling would enable the combined corporate to offer complimentary goods at a reduced price compared to when the products are sold separately. The Commission suggested that bundling would lower the revenues for the GE’s and Honey well’s Competitors in the market. The reduction of revenues would be advantageous to the companies since it would reduce their competitors’ ability to invest. Moreover, it would augment the companies’ capabilities of competing effectively. According to the Commission’s view, the prices could rise in future, and this would cause harm to their rivals and customers in the market. ...