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Online Environment and the Law Essay
In this assignment, I have put together two separate discussions. I will start by discussing ways that anti-trust laws may place too much burden on commerce in the global market. The second part of my paper will explore reasons why discount real estate brokers cannot create their own websites. I will also give example as needed throughout the paper. Anti-trust Laws
The first burden that anti-trust laws place on commerce in the global marketplace is established when trying to revise the trade laws to make them consistent with the competition protection principles of antitrust. Increased openness of the U. S. economy makes foreign firms who export to the U. S. additional competitors in many U. S. markets. Foreign export competition is not always sufficiently strong or reliable that we can abandon antitrust enforcement against domestic price fixing or mergers. The enforcement activity taking place around the world raises the question of how much harmonization can be achieved among diverse nations’ antitrust programs (Neimann, B. 1995)
A second burden is that it is unclear whether competition policy is a sensible role for government in developing, particularly low-income countries. In these countries the markets are usually very small and fragmented. The developing scale sufficient to raise competitiveness and engage in international markets is a major challenge.
Another burden on commerce in the global marketplace is antitrust policy. The challenge is to ensure that the antitrust law does not place U. S. firms at a competitive disadvantage, relative to their foreign rivals. Competition increases product variety and quality. For example, competition from foreign car makers has had a positive effect on our auto industry. Many enforcement areas have become highly technical and specialized. Patterns of trade are changing rapidly as a result of global competition and the increased importance and pace of technological change. Courts have less time and less incentive to deal with the details of competition policy.
The result of all that is that enforcers have increasingly broad discretion, to impose rules often based on Court decisions from 30, 40 and 50 years ago, in a commercial world that has become a very different place (Niemann, B. 1995). Antitrust laws are uncertain in their application, and compliance with them can be difficult and expensive. If a firm is sued in antitrust case, it will likely be obliged to pay substantial or disadvantageous sums to its attorneys and experts, and some of its key officers will have to devote much of their time to preparing the firm to defend itself in the case. The firm will likely suffer bad press. Even if the firm is exonerated of any liability for antitrust misconduct, it will find that it has lost money, effort, time and goodwill (Markham, W. 2006). Discount Real Estate Brokers
There are a few powerful reasons why discount brokers cannot create their own websites. Traditional brokers, and often their trade associations, have used various strategies to limit or prevent the growth of nontraditional brokerage services (Nontraditional Real Estate Brokers: Growth and Challenges). Discount brokers offer buyers and sellers real estate brokerage services at a price lower than the prevailing commission fees.
A discount broker may offer all of the services provided by a traditional broker for a 3 or 4 percent commission in an area where 6 to 7 percent is the prevailing rate. Consumers’ awareness of their ability to negotiate over the price and terms of brokerage services is increasing, due to the increasing numbers of discount brokers that have entered the industry over the past few years (Neimann, B. 1995). Brokers may have conflicting interests that lead them not to provide the consumer with the best possible advice. Home buyers’ increasing use of the Internet may limit brokers’ ability to steer buyers away from discounters’ listings without their knowledge.
Some people have identified discount brokers as key drivers of price competition. Because of this, real estate agents have to reduce their commission rate to keep the client. This means that competition from discount brokers may be partially responsible for a recent decline in commission rates. Another reason that discount real estate brokers can not develop their own website is because several states have imposed so-called minimum-service requirements on brokers. These laws and regulations list specific tasks that a broker must perform for a client. If discount real estate brokers create their own website, it may be misleading to the consumer (Competition in the Real Estate Brokerage Industry).
Discount real estate brokers offer service, price, and representation options different from those offered by traditional brokers who are supported by the National Association of Realtors and state Realtor Associations. New service options include limited service functions such as listing, but not negotiating, and provision of information through the Internet rather than face-to-face. New pricing options include fixed fees, reduced commissions, and rebates, which all have the effect of reducing consumer costs. New representation options include exclusive representation as well as explicit facilitating (Nontraditional Real Estate Brokers: Growth and Challenges).
Over the past decade, services offered by these nontraditional or discount brokers have expanded considerably (Nontraditional Real Estate Brokers: Growth and Challenges). This brings me to the last explanation that I can come up with as to why discount brokers cannot create their own websites; monopoly power. If discount real estate brokers could form in one place, they may create monopolization and have outstanding market power.