Chamberlain College of Nursing
According to the economics textbook by McConnell, Brue, & Flynn; the antitrust law is to prevent monopolization, promote competition, and achieve allocative efficiency. Examples of the antitrust laws are the Sherman Act of 1890, Clayton Act of 1914, Federal Trade Commission Act of 1914, and Celler-Kefauver Act of 1950. Whoever violates these laws is found guilty of a felony. In this paper, I will be discussing about the antitrust investigation conducted on Google by the Federal Trade Commission.
Why was/were the firm(s) investigated for antitrust behavior? The antitrust behavior cased I researched on Google was that of anti-competition behavior. That is Google practice a monopoly market structure and was allegedly using its dominant positions to harm other competitors like Microsoft by manipulating its search results and search advertisement that where paid for (International Business, 2012).
Identify some of the cost (pecuniary and non pecuniary) associated with the antitrust behavior (firms having power in the market). Additionally, note the specific antitrust act (Sherman Act, Clayton Act, e.t.c) under which the violation was investigated.
According to the article by International Business (2012), Google commanded a 75 percent share of the search market on mobile devices while Microsoft had a smaller share. As a result violating The Sherman Act or Federal Trade Act that states that “any person who shall monopolize, or attempt to monopolize,..any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony ( McConnell, Brue, & Flynn. 2012).” And because Google allegedly used it possession of monopoly power to willfully acquire power over its competitors. This was why The Federal Trade Commission investigated and forced Google to pay a fine of $22.5 million dollars (Percha, 2013).
Are monopolies and oligopolies (firms demonstrating power) always bad for the society?
Monopolies and Oligopolies can either be good for the society or