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Antitrust Practices and Market Power - Essay Example

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Firms in these markets and industries formulate and implement competition strategies, the ultimate objective being to outperform competitors. Notably, this…
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Antitrust Practices and Market Power
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Antitrust Practices and Market Power

Download file to see previous pages... The antitrust investigation against Google by Federal Trade Commission (FTC) followed complaints from competing search engines. They claimed that Google had monopolized the search business and online advertising, making it difficult for them to compete. Other search engine claimed that Google had made it hard for new entrants to find their way into the markets and industries that Google had already established operations. The Federal Trade Commission, which prohibits unfair methods of competition and deceptive practices (Areeda & Hovenkamp, 2011), came in to investigate Google’s antitrust behavior.
Although FTC finally closed the investigation against Google without filling any lawsuits, antitrust behavior comes at a cost to the company. Google had to prove its case that it was not engaging in antitrust practices. This drew company resources into the investigation, resources that could have been directed to other company developments. Most importantly, unfair and illegal business activities often taint company image and consumer loyalty. This could eventually mark a devastating turning point for the company.
Investigation into Google’s antitrust behavior was undertaken within the relevant legal framework. The applicable legal provisions included the Sherman Act (1890), Clayton Act (1914), and Federal Trade Commission Act (1914) (Posner, 2001). Under the Sherman Act, Google was investigated for the monopolization claims by other search engines. In the light of Clayton Act, the company’s exclusive dealings were put on the spot. Finally, the FTC Act encompasses unfair and anticompetitive practices for which Google was being investigated.
Perfect competition, monopoly, and oligopoly market structures influence competition differently (Federico, 2009). These market structures determine whether or not there are barriers to entry into any given market ...Download file to see next pagesRead More
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