Paper 2

731 Words2 Pages
bulb-icon

Recommended: Sherman Act and competition regulations

Antitrust Practices and Market Power Google is a firm that came under investigation around 2011 because of allegations it always directed consumers to services they own after consumer had searched through. Another reason it came under investigation was because of what was said to be their association with other Android phone manufacturers. One of the allegations made against Google came from Microsoft. It stated that Google redirected its users to sites they had ownership over because of the fact that Google held a dominant position (Krugman & Wells, 2009). Some of these competing companies argue that consumer should choose winners instead of search sites. They further state that it is unfair for any particular dominating company to use their influence to prevent other competitors from search more importantly in areas such as, media and work. The Sherman act is an antitrust law in the American constitution that prohibits restraining of certain activities in the business sector among nations. It also illegalizes attempts to monopolize a market or at the same time monopolizing a market among the involved nations. Breaking the Sherman act is taken as civil or criminal offence (Pearson, 2001). What is considered criminal includes allocation of customers to oneself, manipulation of product prices and rigging of bids. These criminal actions attract up to three years imprisonment or a fine of 350,000-10,000,000 dollars. According to law, various categories of damage or loss are recognized. When according to proceedings loss is translated directly in form of money, then the term pecuniary would be used in legal terms to mean so (Vatiero, 2010). Unpecuniary if used in legal terms would mean loss that can’t be measured directly in form o... ... middle of paper ... ...power. When price makers realize a rise in prices leading to low demand for goods and services, it is called a downward slopping demand curve. The rise in price is the main reason customers look for cheaper products to replace the more expensive ones. A deadweight loss on the other hand is a case created by a decrease in supply due to market power and by this causing an increase in prices (Vatiero, 2009). There is always confusion between market size and market power. These two don’t mean the same thing however. Market powers sometimes engage in bad behaviors like setting prices to curb influence of other firms, creating barriers and overcapacity. Several countries have come up with useful legislation for example the antitrust so as to prevent organizations from gaining market power. The purpose of some of these laws is to prevent companies from joining each other.

Show More
Related

  • Laws for Fair, Balanced and Competitive Business Practice

    658 Words  | 2 Pages

    The Sherman Act outlaws every contract, combination or conspiracy in restraint of trade. It also prohibits any attempt to monopolize. The Sherman Act enforcement can be civil or criminal. The criminal penalty can be up to $1 million for an individual and $100 million for a corporation. The Federal Trade Commission Act bans unfair methods of competition and deceptive acts or practices. Violation of Sherman Act also violates Federal Trade Commission Act. The Sherman Act and Federal Trade Commission Act are very effective, but they do not address certain specific practices. The Clayton Act addresses some specific practices such as mergers and interlocking directorates. For example, Section 7 of Clayton Act prohibits mergers and acquisitions that lessen competition or tend to create monopoly. Apart from these three core antitrust acts, most states also have antitrust laws. (FTC, 2014)

    Read More

  • Kodak Appeals To Court

    1325 Words  | 3 Pages

    The conventional definition of market power is usually expressed as "the power to raise price." A company with market power has some amount of discretion to set its own price. Others can define market power as the power to force a purchaser to do something that he would not do in a competitive market, and have ordinarily inferred the existence of such power from the seller's possession of a predominate share of the market (Eastman Kodak v. Image Technical Servs, 1992). Market power could also be defined as the power profitably to raise or maintain price above the competitive benchmark price. The competitive benchmark is the price that would prevail in the absence of the alleged anticompetitive conduct. This benchmark price often differs from both the current price and the perfectly competitive price (Salop, Steven C, 1999). In economics, market power is the ability of a firm to alter the market price of a good or service (Wikipedia). A firm with market power can raise price without losing all customers to competitors.

    Read More

  • paper

    986 Words  | 2 Pages

    What are the main components of the criminal justice system? How do they interrelate? How might they conflict?

    Read More

  • Sirius and XM Satellite Radio as a Monopoly

    798 Words  | 2 Pages

    Since this debate still rages on, many people argue both sides of the story of the pros and cons. Many would argue that not breaking up monopolies actually increase the competition of companies that are attempting to break into some of the market share that the monopoly already has, more so than the free market that exists now. Proponents of the Sherman Anti-Trust act argue that “absolute power corrupts absolutely” (Martin, 1996) as originally quoted by Baron Acton. The idea that no competition within the business world establishes no risk and reward that is all part of the entrepreneur spirit of the U.S. spirit.

    Read More

  • The Key Causes Of Market Failure In The London Housing Market

    1320 Words  | 3 Pages

    Market failure is a situation in which the free market fails to allocate resources effectively, causing a situation where the quantity demanded by the consumer is unequal to the quantity supplied by the supplier.

    Read More

  • Paper

    703 Words  | 2 Pages

    A model organism is a non-human species that is extensively studied to understand particular biological phenomena. The observations are expected to provide insight into the workings of other organisms. When we study disease, development and genetics in biology, they need to be studied in vitro to see how these processes (i.e. pathways and signals) work. Studying these in humans could be considered unethical or unsafe, and very expensive. Model organisms provide insight that we can’t gain from lab equipment alone. What we learn in model organisms can be used to predict what would happen to other organisms. All organisms evolved from the same ancestors and pathways are the same across all different species. Model organisms are a small number of species that have been studied extensively. We extrapolate information from model organisms to understand developmental, biological and metabolic pathways conserved throughout evolution. A model organism is one that can be used to effectively conduct biological research. They are necessary so that researchers can conduct their experiments quickly and efficiently while producing accurate results. Model organisms tend to be simple, making it easier for researchers to change one element and analyze the effects of that change.

    Read More

  • The Importance Of The Sherman Antitrust Act

    1447 Words  | 3 Pages

    Before the act, although monopolies were legal, it opened the door for federal investigations into good monopolies and bad monopolies. The act prevented the industries from obtaining too much power, however, the Sherman Antitrust Act was not completely efficient. The vague language used in the Sherman Antitrust Act proved it easy for companies to find legal loopholes, allowing them to engage in otherwise restricted business. The Clayton Antitrust Act was introduced in 1914 to clarify the principles the Sherman Antitrust Act set out to do. While the Sherman Antitrust Act said that monopolies were illegal, the Clayton Antitrust Act “defined as illegal certain business practices that are conducive to the formation of monopolies or that result from them. For example, specific forms of holding companies and interlocking directorates were forbidden.” (Britanica) This legislation was influential and was used to dissolve many monopolies in years to

    Read More

  • Analyzing the Internal and External Environment of Google

    2880 Words  | 6 Pages

    ...as not only been reliable when it arises to offering a product of the highest and excellence, nonetheless is also continually developing, adjusting, but more meaningfully revolutionizing the industry. Also, what creates Google’s invention so matchless in assessment to its challengers is the attention that it offers to consumer requirements in order to offer a consistent and difficultly substituted the product rather than concentrating on exploiting its profit with each given chance which may cooperation the quality of its search consequence its product. Having examined the company’s internal and external environment it is obvious that Google earnings care and attentions even to the smallest detail to guarantee that it will be the leading company between many other online search engines and has been able to create loyal customers that are continually growing.

    Read More

  • paper

    538 Words  | 2 Pages

    1. A child is 1 year old. She is shy around strangers and cries when her parents leave. Is this cause for concern?

    Read More

  • The Economics of Predatory Pricing

    1754 Words  | 4 Pages

    Predatory pricing “is alleged to occur when a firm sets a price for its product that is below some measure of cost and forfeits revenues in the short run to put competitors out of business” (Sheffet p.163-164). The reason firms take the short term loss is because they hope to drive out competitors and raise prices to monopolistic levels. By doing this, they covered their short term loss to make even greater profits in the long term than they would have by not using predatory tactics (Sheffert). Predatory pricing became illegal under Section 2 of the Sherman Act. It has remained one of the more difficult allegations for prosecutors to prove, due to the complexity of determining the company’s actual intent and whether or not it the strategy is competitive pricing. According to Areeda and Turner, there are three ways to determine if a firm is implementing predatory pricing. First, a price above marginal cost is presumed lawful; second, a price below marginal cost is considered unlawful, except when there is strong demand; and third, average variable cost is considered a good proxy for marginal cost. This is a reason predatory pricing is still important today. The courts must decide whether or not companies are engaging in competitive prices for the good of the consumers or are using predatory tactics for the good of their own company. The purpose of this paper is to focus on the current legislation regarding predatory pricing, determining when there is predation in an industry and the cause and effect relationship it has on an industry.

    Read More

  • Regulation Data Protection and Personal Data Privacy

    2928 Words  | 6 Pages

    This report will describe the history of government regulations and FTC. How that applied to Google search and personal privacy. The changes made from the settlement between Google and the FTC, the difference Google's practices and policies from before the settlement and after the settlement, and the current demands and expectations from current and vocal Google users. The report will also draw a conclusion from the findings and will determine if additional regulations are needed or if the regulations currently in place are sufficient.

    Read More

  • Google's Knowledge Management

    2447 Words  | 5 Pages

    Google Inc. is a company that started in 2002 and has gradually grown to become an international technology company. Google’s business is mainly focused around vital areas, like advertising, search, operating platforms and systems and platforms, hardware products and enterprise. The company produces its revenue mainly by distributing online advertising. Google also produces revenues from Motorola through selling products. The company offers its services and products in over 100 languages and in over 50 regions, territories and countries. The company assimilates various features in its search service and gives dedicated search services to aid users modify their search. Google also gives product-listing advertisements, which comprise of product information, like price, merchant information and product image without needing ad text or extra keywords.

    Read More

  • Ethics and Information Security

    1140 Words  | 3 Pages

    ...t for illegally profit, the consequences will be unfavorable; therefore, a decision has to be made in order to protect the rights of the original owner and the responsible party must be held responsible for any infractions.

    Read More

  • Google's Dilemma in China

    1222 Words  | 3 Pages

    Google is the largest search engine across the globe, which has significantly transformed the use of the Internet as an information source. The influence of Google in Internet use as information source is evident in the fact that by June 2010, it accounted for more than 70 percent of total Internet searches in America. In addition to its success and profitability in the global market, Google is renowned as a highly ethical company as demonstrated in its corporate philosophy features. However, the firm’s behavior during the launch of its China-based search engine in 2006 generated huge skepticism from the United States government and several human rights organizations (Baker & Tang, p.2). Since the launch of Google’s Chinese search engine, the company complied with China’s censorship regulations by deciding to filter out terms that are considered politically sensitive. This decision attracted criticism from political leaders and human rights activists who accused Google of betraying its adopted ethical standards by ignoring the essence of freedom of expression and information access. As a result, Google faced a dilemma involving the clash between law and ethics. In the subsequent years, Google reacted to the dilemma by changing its rhetoric strategies in efforts to respond to the changing needs.

    Read More

  • Google And The Government Of China

    1782 Words  | 4 Pages

    Interests: The image of Google in the media and among investors will be seriously damaged if it act antithetically to its philosophy of “Don’t’ be evil” It might affect negatively to the future prosperity of the company.

    Read More

More about Paper 2

Open Document