Antitrust Practices Sources for your Essay

Market Power and Antitrust Practices


The ruling of the court barred Microsoft from bundling the IE with Windows on the ground that the Microsoft action attempted to eliminate the Netscape from competitive landscape. (Lenard, 2000)

Market Power and Antitrust Practices


Rather, the company was trying to improve the consumer welfare by charging low or give away price for its software. (Reddy, David, and Albert, 2000)

Market Power and Antitrust Practices


One of the negative effects of monopoly is that it discourages consumers to make a choice from wide variety of products thereby reducing the aggregate welfare of consumers. (Stigler, 2013)

Market Power and Antitrust Practices


In 1990s, the Department of Justice investigated Microsoft for various antitrust allegations, and the government accused the Microsoft of using its monopoly power of its PC (personal computer) operating system to harm competitors and exclude rivals. (Stucke, 2013)

Antitrust Practices and Market Power


Microsoft was investigated specifically under the Sherman Antitrust Act, particularly the first two sections which state that restraining trade and monopolizing trade internationally or between U.S. states is illegal (Haw, 2011, p

Antitrust Practices and Market Power


The company had established something of a natural monopoly of the software market (which is distinct from a government monopoly), and was leveraging its considerable market power to systematically eliminate its competition. It is legal to establish a monopoly in any given industry; yet it is illegal to "use certain practices that have no commercial justification in an effort to further entrench the monopoly" (Hazlett et al

Antitrust Economics Antitrust Practices and Market Power:


Q3.Given your research and findings, are monopolies and oligopolies (firms demonstrating power) always bad for society? However, while Facebook has a greater market share of users than its competitors (such as, for example, Google+), users can also become members of more than one social networking site, particularly since participation on the platforms are free (Efrati 2103)

Antitrust Economics Antitrust Practices and Market Power:


Questions of jurisdiction arise, given that Facebook has an international outreach, and there are differences between, for example, American and EU definitions of what constitutes a monopoly. Comparing Facebook's market share (national or international) with other applications such as YouTube and Twitter is problematic, given the different ways users access these applications (Ingram 2013)

Antitrust Economics Antitrust Practices and Market Power:


"From an antitrust standpoint, monopoly power is the power to raise price or exclude competition. Monopoly power is not unlawful in its own right, but unless a firm is deemed to have monopoly power (or at least a dangerous probability of acquiring such power), it cannot be held liable for monopolization or attempted monopolization" and having a negative impact upon consumers (Waller 2012: 1775)

Antitrust Practices and Market Power


Amazon would, for instance, sell more Kindles by deeply discounting e-books, taking a loss on that segment while making it up on the hard goods side; using price to increase its market share and monopolization of the e-book market. The European commission maintains that even association pricing is unfair, because it limits the ability for non-mega giants to compete fairly in the market because their wholesale costs are often considerably higher than Amazon's retail price (Barker, 2011)

Antitrust Practices and Market Power


Price-fixing, though, is an agreement reached between businesses to buy or sell at fixed (manipulated) prices in order to control the market. The major difference between a monopoly and an oligopoly is the number of players that are manipulating the market -- monopoly means only one provides the product of service, but in an oligopoly, the product or service is available from a given number, yet still a few large businesses dominate this market and make it very difficult for new businesses to enter (Friedman, 1990; Schenk, 2010)

Antitrust Practices and Market Power


During the lawsuit: Microsoft contended "that it, and it alone, should be the arbiter of what new software is bundled into its Windows operating system, the equivalent of the central nervous system on 90% of personal computers. Besides, Microsoft contends, its Internet browser is not a separate product, as the Government asserts, but an 'integrated feature' of Windows" (Lohr 1998, Ruling on Microsoft)

Antitrust Practices and Market Power


During the lawsuit: Microsoft contended "that it, and it alone, should be the arbiter of what new software is bundled into its Windows operating system, the equivalent of the central nervous system on 90% of personal computers. Besides, Microsoft contends, its Internet browser is not a separate product, as the Government asserts, but an 'integrated feature' of Windows" (Lohr 1998, Ruling on Microsoft)

Antitrust Practices and Market Power


In the eventual settlement between the government and Microsoft, Microsoft had to share information with third parties to enable them to more easily create browsers that would be just as compatible with Windows as Internet Explorer. "The DOJ emphasized the goal of the settlement was to ensure a competitive environment for so-called middleware applications, such as Web browsers and media players, that could help erode the Windows monopoly" (Romano 2007)

Antitrust Practices and Market Power


When these two companies always charge the same fees, it opened up the possibility of antitrust legislation, with accusing of collusion. The settlement meant that the companies were not officially found of any wrongdoing (Grossman, 2012)

Antitrust Practices and Market Power


Costs to the Market There are costs associated with antitrust behavior, and that is why the government has pursued these cases. The credit card industry is a complex ecosystem that includes store cards, but third-party cards operate under oligopoly conditions, with three companies (Mastercard, Visa and American Express) holding a commanding share of the market (Heggestuen, 2014)

Antitrust Practices and Market Power


The government has argued that American Express has hindered competition in the credit card market. At issue are rules that AMEX imposes on retailers to prevent them from offering incentives to customers to use other cards (Longstreth, 2014)