Essay On Antitrust Practices And Market Power

Google Company faced antitrust allegations over two accounts. The major problems were on the existence of monopoly power and predatory conduct undertaken to attain or maintain the power. Monopoly comes into play through the manner in which it offers its services across the world. Other stakeholders in the service complained of how most users preferred Google services as compared to theirs under the same circumstances. The other issue surrounding monopoly are the steps taken by the company to ensure that most of the clientele appreciate its services and appreciate the steps taken to ensure that the same is taken. Monopoly in the global market has the negative effect of hindering other service providers from facilitating their products to the same population (Houck, 2011).
Each aspect of the company has facilitated discrimination to other companies that fight for the same solutions towards attracting more customers that will enhance the profit making at the end of the day. Monopoly also has the other influence of barring other players’ entry into the same opportunities. The mentality already established by Google to the local, regional and international markets over the past years has breached the aspects of all oligopoly market structure. Sherman Antitrust Act of 1890 was enacted to regulate how different business entities run their business across the same available markets. This act was majorly used to understand the relationship that Google has in the market in relation to the other stakeholders. Every opportunity available in the market should be used to ensure that each player enjoys the same scenarios that are provided. The act has established circumstances that antitrust competition arises. Violation per se and violation under the rule of reason have been identified as a challenge to the consumer in relation to the service and product provider (Pettinger, 2008).
The law was majorly to protect the user of any service against the extortion of a monopoly provider. The different sections of this Act have provided for diverse regulations that protect the customers from market capitalization or during occurrences of download sloping demand market curves. The protection will ensure that each step has been followed to safeguard the requirements of every end user of any merchandise (Houck, 2011). Monopoly in businesses is seen in the area of mall services where TESCO enjoys the same characteristics. The business has opened world subsidiaries to expand its profits but control the prices that are offered in each stall without risking any competition from other players in the same field. The practices established have influenced the market negatively and, as a result, offers no second options for their customers.
The other allegation was of predatory maintenance of monopoly characteristics is also a negative impact in the business market for other business partners who have an interest in the same area. The steps in such areas will entail exorbitant advertisements and customer bonuses that come with their services. Customers prefer services that are user-friendly and benefit them to the maximum of their use. Such characteristics have been associated with Google products and services across the world. The company has ensured that in every region the clientele benefits from all the products the company provides. Every step placed by the company has ensured that the users of its services have maintained loyal to the business entity to ensure that the market grows, and the users continue using the same services that are available at the different scales. The concern of other players has been the persistent business market supremacy that Google has taken to facilitate the same during its expansion of the economic zones available (Houck, 2011).
The Clayton Antitrust Act of 1914 has also been another supportive legislation that anchors the previous Sherman Antitrust Act of 1890. The legislation has ensured that different entities are protected against monopolistic practices by big companies which enjoy the capital market. The act has energized protection to all end users through criminalizing aspects that tend to cling towards unhealthy competitions. Most aspects of these scenarios can be observed through the different practices that undergo in the business world. Marginal cost and revenue ensure that the legislation is put into consideration to balance between the consumer and producer. A case example is seen in the Mac Donald’s fast food joint that has different branches across the globe. The business entity enjoys a wide area of clientele in relation to other similar entities that facilitate similar services (Pettinger, 2008).
Antitrust behaviours in the market have been facilitated by different consumer needs and requirements that attract individuals to the given service provider. The costs that come with the antitrust characteristics are both pecuniary and non-pecuniary. The pecuniary costs come into play where other businesses that compete in the same sector face spending more money to attract more customers through different measures taken to facilitate the use of their products. The issue of cash comes in handy where the manner of balancing expenses in relation to profits that are required to maintain the running of the company. The maintenance of the pecuniary value of the company runs across the initial development of the company, paying workers and taxes required by the laws regulating the issues of all entities in the area. Each promotion that is economic profit in nature requires monetary support and in places where profits are not made, antitrust laws facilitate such issues on the same company (Manuel, 2015).
Non-pecuniary issues come into play where customers or consumers prefer products from one company as compared to the other. It is no doubt that Google provides services that are attractive to the user in any local, regional or international market. The efficiency of its products has ensured that the public remains loyal to the company, and the business empire continues to grow and expand every day. Such opportunities have been detrimental to other potential providers of the same services to the global market. Every undertaking has to comply with antitrust legislations that promote fair business practices that ensure every person enjoys the market (Manuel, 2015). Lack of diversity in the market is also another non-pecuniary problem that might arise from such practices. The manufacture of any product in the market has to ensure that every consumer has a diverse taste of different products that are available in the market. The problem of monopoly played by Google has hindered such opportunities that are against the laws surrounding the area of running businesses (Pettinger, 2008).
The demonstration of monopolies and oligopolies practices has a negative impact on the local, regional and international markets. The issues of prices hiking will be a major negative outcome of encouraging such practices in the society among the big players in any competitive business. Each company will take the opportunity available to manipulate the market figures to ensure that it maximizes the available profits from the end users of their services and products. The rent-seeking behavior will kill the trust of users towards the trust they place on the companies. The only scenario where monopoly practices have benefited the society occurs is in services that are less profitable to the company and are more societal oriented. Water, gas and electrical companies are monopolistic in nature but are considered beneficial to the society. The dead weight loss to the society will cushion each member to enjoy all resources available. An example is the OFWAT that regulates the supply of water prices in the regions across the country. Such service is beneficial to the society and offers the different consumers, private and public to enjoy the same opportunities of end products and services as a benefit attributed to natural monopoly of the company (Pettinger, 2008).

References

Houck, S. D (2011, 7 September). Google, monopoly and antitrust 101. Huff Post Tech. Retrieved from http://www.huffingtonpost.com/stephen-d-houck/google-antitrust-hearings_b_1000205.html
Manuel, N (2015). How does a monopoly affect business and consumers? Chron. Retrieved from http://smallbusiness.chron.com/monopoly-affect-business-consumers-70033.html
Pettinger, T (2008, 9 February). Are monopolies always bad? Economics. Retrieved from http://www.economicshelp.org/blog/265/economics/are-monopolies-always-bad/