Question: Antitrust Practices and Market Power

Antitrust Investigation

Antitrust investigation is the practice of government authority to make the organization and society free from fraudulent activities. The recent case of Google is selected to discuss the reasons and actions of FDI and Google both at the time of such situation.  

Reason behind Antitrust Investigation

Google has been investigated for antitrust behavior in recent time by Federal Trade Commission on the basis of some assumptions. FDI has doubted on Google’s searching tactics as FTC claimed that Google uses unfair activities and its market power to influence companies for using its products and services if they want to make a peaceful position in the market. At that time, Google’s market image was in big danger and all users were also doubts about it like FDI (Plafke, 2013). The continuous success of Google was the main reason behind this investigation. It was noticed by FDI that Google has occupied quite huge part among internet world. It has travelled quite a large journey from search engine to text, to chat, to video, to voice, to emails, to social networking. This free online facility has earned quite the large market power and that was the main point of antitrust investigation (Lohr, 2012).  

Cost Associated with Antitrust Investigation

The decision to investigate Google was born with some aspects which were clearly seen by FDI. In this case, the non-pecuniary has played a vital role as it denoted towards the market power of Google. After seeing such strong market power of Google to other companies, the thought of investigating Google is occurring in mind on FDI’s authorized people. But somewhere pecuniary cost was also present there as per the reason of such investigation. As Google is grabbing more and more market with time so it gives a huge hike to the financial area as well (Gustin, 2013). The hike in revenue per year was another point which has become Google in the lime light.

The investigation is taken into account in the assessment of United States Antitrust Law which includes three acts Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. These acts were the base of this investigation which has influenced due to Google’s monopoly, huge market share, partnerships with companies etc. (Schlossberg, American Bar Association & Section of Antitrust Law, 2008)

Impact of Monopoly and Oligopoly on Society

Monopoly refers to the market where one enterprise has gained most of the market through power. Oligopoly refers to the availability of very few competitors into one marketplace. In the case of Google, the market power has developed barriers for entry of new competitors. FDI believed that Google has monopoly in both search and search related advertising. It was also blamed that Google is using its market power and generates billions of money which directly harms competitors. According to the FDI, Google is damaging social values as well as it is not giving chance people to experience other search engine. This case of an antitrust investigation by FDI against Google did not erase its good image at all (Foer & Stutz, 2012). Therefore this was a quite positive case which strengthens Google after it.

Example of Positive Monopoly/Oligopoly

Monopoly’s positive impact on today’s society is quite rare because of FDI’s antitrust investigation procedure. Due to this inclusion, no firm can made monopoly in the market except Google which don’t include any antitrust activities. On the other hand, there are some such industries where oligopoly can be till today. Breakfast cereal is perfect example that not only generates oligopoly in the market but impacts positively on society as well. In the United State, there are three major players General Mills, Post and Kellogg on which people trust at most. The priority of US people in time to choose a breakfast cereal would be one of these three (McEachern, 2011). It is because people trust over quality that they will be healthy if they take this brand breakfast.

Overall, antitrust investigation is a huge effort of FDI which affects organizations in a very positive manner and society as well. The case of Google was quite an effective example where all doubts of FDI has proved false.    

References

Arthur, C. (2012). Digital Wars: Apple, Google, Microsoft and the Battle for the Internet. Kogan Page Publishers.

Foer, A.A. & Stutz, T.M. (2012). Private Enforcement of Antitrust Law in the United States: A Handbook. Edward Elgar Publishing.

Gustin, S. (2013). Google’s Federal Antitrust Deal Cheered by Some, Jeered by Others. Retrieved from http://business.time.com/2013/01/04/googles-federal-antitrust-deal-cheered-by-some-jeered-by-others/

Lohr, S. (2012). Drafting Antitrust Case, F.T.C. Raises Pressure on Google. Retrieved from http://www.nytimes.com/2012/10/13/technology/ftc-staff-prepares-antitrust-case-against-google-over-search.html?pagewanted=all&_r=0

McEachern, W.A. (2011). Economics: A Contemporary Introduction. Cengage Learning.

Plafke, J. (2013). Google emerges from 19-month FTC antitrust investigation nearly unscathed. Retrieved from http://www.extremetech.com/mobile/144747-google-comes-out-of-19-month-ftc-antitrust-investigation-unscathed

Schlossberg, R.S., American Bar Association & Section of Antitrust Law. (2008). MERGERS AND ACQUISITIONS: Understanding the Antitrust Issues. American Bar Association.

Tarruella, A.L. (2012). Google and the Law: Empirical Approaches to Legal Aspects of Knowledge-Economy Business Models. Springer.