23 a. EAuction and EMarketplace are two competing Internet auction sites, where

Question

23    a. EAuction and EMarketplace are two competing Internet auction sites, where buyers and sellers transact goods. Each auction site earns money by charging sellers for listing their goods. EAuction has decided to eliminate fees for the first transaction for sellers that are new to their site. Explain why this is likely to be a good strategy for EAuction in its competition with EMarketplace.

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b.       EMarketplace complained to the Justice Department that EAuction%u2019s practice of eliminating fees for new sellers was anti-competitive and would lead to monopolization of the Internet auction industry. Is EMarketplace correct? How should the Justice Department respond?

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c.        EAuction stopped its practice of eliminating fees for new sellers. But since it provided much better technical service than its rival, EMarketplace, buyers and sellers came to prefer EAuction. Eventually, EMarketplace closed down, leaving EAuction as a monopolist. Should the Justice Department intervene to break EAuction into two companies? Explain.

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d.       EAuction is now a monopolist in the Internet auction industry. It also owns a site that handles payments over the Internet, called PayForIt. It is competing with another Internet payment site, called PayBuddy. EAuction has now stipulated that any transaction on its auction site must use PayForIt, rather than PayBuddy, for the payment. Should the Justice Department intervene? Explain.

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Explanation / Answer

1.this is supposed to be god strategy because, in e-auction,but certainly with some constraints,like you need to set up the commodities of perticular price range.you can providing services and hence, that is benificial to make site famous and habitual.

2.no, emarket is partially true. since oth are working in same sector , both have to understand markety chemes and trend.but one has to do something to attract people at first. Hence the schemes.thejustice department in such case allows such offer to work for particular period of time.

3.Definately not!its the brand and quality that matters to the people and when people are getting it they did quit the other options.its fare and with objections.

4.no! its all fare. because the company has the choice of making the decision for iuts own benifit as stated in rules.however such steps will afferct not only e auction's market but also its rival. hence, it will stop such restrictions soon.

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