Why was/were the firm(s) investigated for antitrust behavior?
The case to be evaluated in this case is the investigation of Google by the European Union against abusing its supremacy in web searches. The company is accused favoring its personal products over that of its rivals in search results. The company is said to divert traffic from rivals’ competitors to favor its own equivalent shopping site (Kanter & Scott, 2015).
Identify some of the costs (pecuniary and nonpecuniary) associated with the antitrust behavior (firms having power in the market).
The antitrust act of Google has gained the company’s products great market share in the world market. Google products dominate in the mobile phone market. Android, which is one of the Google famous products, takes about 90% of the world phone software market against its rival Microsoft. This according to EU has been facilitated by Microsoft inability to advertise its product due to Google biasness of redirecting Microsoft traffic to their shopping center. This has jeopardized the Microsoft ability to compete with Google in the phone software market. Google is therefore associated with very huge profits as compared to its rivals.
Additionally, note the specific antitrust act (Sherman Act, Clayton Act, etc.) under which the violation was investigated.
This investigation falls under Claytom Act which prohibits companies from carrying out processes that would undermine competitiveness (Law.cornell, 1992). Android may have dominated the phone software market not due to it superiority as a product, but because Google has the power to control the users traffic. In this regard, Google is taking this advantage to make more and more people be familiarized with android while blocking them from realizing that there is a substitute for the android. This way, the company interferes with Microsoft ability to compete equally in the market.
Given your research and findings, are monopolies and oligopolies (firms demonstrating power) always bad for society?
Demonstrating power in the market is not healthy to the society. This is because the company presents itself as the only source of a product which is highly needed in the market. However not always monopoly or oligopoly can is bad, sometime monopoly gives assurance of quality and assurance. For instance oligopoly in pharmaceutics product ensures that people use quality medicines that are carefully produced not mostly to make money but to ensure good health.
Order Unique Answer Now