Antitrust Practices and Market Power | DeVry University | Eva Wise |

Antitrust Policy consists of laws and government actions designed to prevent monopoly and promote competition. On June 23, 2011, the U.S. Federal Trade Commission initiated an antitrust probe into Google, the world’s largest search engine. FTC’s investigation entailed a broad probe into Google’s business practices and weather it was abusing its search power to drive traffic to its own properties over rival sites and services. After a nearly twenty month high-profile investigation, the federal government announced on January 3, 2013, that its dropping an “exhaustive” probe into Google as it found no evidence the company was abusing its search power. Google was investigated under violating the Sherman antitrust act. “The definitive antitrust statute, passed by Congress in 1890, that prohibits monopolies or unreasonable combinations of companies to restrict or in any way control interstate commerce. Specifically outlawed is two or more persons engaging in monopolistic practices, such as price fixing, although it does not outlaw price-fixing per se. It was amended in 1914 by the Clayton Act, which outlaws interlocking directorates and deals with acquisitions that aim to restrain or eliminate competition. (Your Dictionary Law)” “For example, one element of a duty-to-deal claim under the Sherman Act is proving that Google’s treatment of rival websites harms consumers; even the cleverest economist would be stumped with that assignment. (Singer, 2012)” The Sherman Act prohibits monopolies, attempts to monopolize, or conspiracies to monopolize. A monopoly is a form of market structure where only one or very few companies dominate the total sales of a particular product or service, such as Google. A big competitor is Yahoo. The public suffers under a monopolistic market because it does not have the quantity of goods or the low prices that a competitive market could offer.
I believe monopolies and oligopolies can be good, bad, and downright ugly, but they are not always bad for society. Researched showed me that good monopolies come in several forms, such as a natural monopoly and a technical monopoly. An example of a natural monopoly is the local electrical utility. The feature of a power plant is that as the size of it increases the cost per kilowatt hour of electricity falls, which benefits society. An example for a technical monopoly would be patent protection. When a company invents a new product it gets a patent protection for it, which makes the company a technical monopoly for that specific product. The United States Patent and Trademark Office protects the company’s new patent for up to 20 years. Patent protection encourages research, development, and to invent new things, which is a benefit for society. Oligopolies tend to have more disadvantages then advantages, but research shows that it can also be good for society. Customers can use oligopoly as an advantage to easily make price comparisons. The companies are forced to set their prices competitively based on the easy price comparison, which is a positive outcome for society. Set and stable prices help society to plan and stabilize their spending.

Bibliography
Singer, H. (2012, 12 05). The FTC's Decision to Reject the Search Antitrust Case against Google.
Your Dictionary Law. (n.d.). Retrieved 03 20, 2013, from Sherman Antitrust Act - Legal Definition : law.yourdictionary.com/sherman-antitrust-act