THE LEGAL ENVIRONMENT OF BUSINESS - Essay Example

A Brief History of Monopoly Law in the United States Monopolies came into being in the United States during the colonial administration. The public sector wanted to make some new world and old immigrants changes. Most companies were provided with exclusive contracts by the colonial administrations. Even after the colonial handovers, the American nation functioned effectively to ensure that the contracts and the land were held. Since then, the federal Government usually implements the antitrust laws.

The laws seek to protect consumers from companies that tend to become monopolies and abuse the market. These laws include the Sherman Antitrust Act, which prevents the formation of a monopoly. If a company decides to operate in a monopolistic manner, the Act seeks to remove it from the market. In case there are any antitrust laws, the government takes charge through the office of the U.S or through the respective Attorney in the States. In this case, the United States Government and the 19 States filed a suit against Microsoft for operating as a monopoly.

The Sherman Act forms the basis of modern-day Anti-trust legislations whose mandate is to protect consumers from wayward corporate practices that aim to exploit them. In essence, the Act tries to promote integrity in the market and for companies to operate in a competitive environment. Monopolies together with their subsidiaries or acquired companies can lead to great developments though the only downside is their control on the market. Unless monopolies prove a threat to national security, they can be embraced for the provision of certain products and services (Yao and Loo 34).

Monopolization has a downside, since it is the sole supplier of certain goods and can decide to produce substandard and low quality goods (Boldrin and David 36). Monopolies create barriers to entry in the market due to large economies of scale among other factors (Yao and Loo 34). This reduces the marginal costs in producing additional units since the price is increased. Therefore, it is better to remove monopolies and promote competition, which will ensure good quality goods at affordable prices.

This eliminates price fixing and the exploitation of end users (Boldrin and David 33). Firms may collude to operate as one in distribution of products. This is possible where the companies are involved in a similar business operate producing related products. Collusions lead to the formation of oligopolies, which reduces competition in the market. The firms can be involved in the price fixing that disadvantages the buyer. If the large firms collude, they gain the market and result in imperfect competition between the large and small firms.

The firms obtain market power and thus determine prices to the disadvantage of the smaller firms. An example of oligopoly is the internet where few firm control the internet. These are shaw, Telus, Bel and Rogers. Government monopolies are usually involving in distribution of products, which if left to the private sector would undergo exploitation. An example is the armed forces and the military (Lynn 22). In my opinion, Google is a monopoly company facing many criticisms most of the prompted by Microsoft.

The main question has been whether Google is abusing its monopolistic position. Studies reveal that the company has been encrypting traffic for many years, and the recent changes were prompted by the USA over Kerfuffle as they attempt to force people to