1.9.

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 its site. Explain why this is likely to be a good strategy for EAuction in its com-

petition with EMarketplace.

b. EMarketplace complained to the Competition Bureau that EAuction's 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 Competition Bureau respond?

c. EAuction stopped its practice of eliminating fees for new sellers. But since it provided much better technical service than its rival, EMarketplace, buy-

ers and sellers came to prefer EAuction. Eventually, EMarketplace closed down, leaving EAuction as a monopolist. Should the Competition Bureau intervene to break EAuction into two companies?

Explain.

d. EAuction is now a monopolist in the Internet auc-
tion 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 PayForlt, rather than PayBuddy, for the payment.
Should the Competition Bureau intervene? Explain.