COMPETITION LAW
Summative Essay Title
Over the last two decades, Global Trading Inc. has massively expanded its trading operations in both the UK and the EU by continuously tripling its initial share of 30% of the market for innovative gadgets.
Global Trading Inc.’s success rests on its most aggressive premium discounting of 45% off sales of hard drives, inclusive of a portable storage solution, offered to an inner circle of trusted manufacturers, PC Europe GmbH and Tablets Industrie EURL, for nearly four years of continuous and unwavering support.
Since 2019, when UK Storage Solutions Ltd had proudly launched its own cloud storage offering, Global Trading Inc. has formally lowered its premium discount to just 4% off sales of hard drives, which has greatly diminished Storage Solutions’ unstable and low market share of continental sales.
As a result, Storage Solutions decided to strengthen its UK market leadership by adding a new line of smart cameras for pet owners and concerned parents at a promotional discount of 20% off during its winter and spring sales for the last two consecutive years.
Once Storage Solutions had started offering the above discount, its executive manager, J.F. called for a shareholders’ meeting to discuss the sudden and unexpected drop in continental sales which the executive team believed to be attributed to Storage Solutions being displayed only on page 3 of Troogle Universal’s algorithm-driven search machine and on the seventh position of the first page of Troogle’s rival search machine, Wingo.
J.F. explained that unfortunately, without increasing their indispensable spending on Troogle Ads, UK Storage Solutions would have to imminently exit the EU market for good. In addition, J.F. mentioned that the company cannot survive in the UK market for too long without renting, at least temporary, access to Surfing Inc., a global leader of anonymised and aggregated data analytics for artificial intelligence and for targeting affluent consumers with a sensible discount intended to boost Storage Solutions’ already declining market shares.
In December 2021, Tablets Industrie EURL decided to increase its online retail price by withdrawing its attractive offering of 20% off sales when online consumers bought their most exclusive bundle comprising of a tablet, a cloud storage solution, and a smart camera to honour an earlier promise made to Global Trading.
In contrast, PC Europe GmbH decided to continue offering its most exclusive festive bundle of mobile phones for ‘Family plus +++: buy 3 for 2’ to qualify for 25% online discount, fearing an imminent investigation concerning its pre-installed digital assistant and photo apps.
Early January 2022, a disgruntled employee of Global Trading Inc., who was headhunted by UK Storage Solutions, disclosed several internal emails, and leaked confidential memos coming from Global Trading’s CEO, including the following:
‘No. 1 priority: global market leader for most innovative gadgets;
No. 2 priority: increase European prices by reducing all but one customer discounts subject to capping the retail price at a maximum of 6% off sale;
No. 3 priority: increase UK prices for smart gadgets upon Storage Solutions’ imminent departure’.
UK Storage Solutions has made a complaint to the CMA and the DG COMP.
Advise Global Trading Inc., PC Europe GmbH, Tablets Industrie EURL and UK Storage Solutions Ltd as to any possible anticompetitive conduct and its objective justification in the course of proceedings before the CMA and the DG COMP.
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