Question

What laws work to prevent a monopoly in the United States economy? Which federal agencies can block a merger? Discuss a recent example. Do you think this was a good or bad decision for consumers?

Answer 1

Answer:

Antitrust laws work to prevent a monopoly in the United States. These laws make sure that there is no concentration of economic power in few hands. These aim at a fair competition in the market for the protection of consumers.

The three major Antitrust laws are:

1) The Sherman Antitrust Act of 1890

Anti-competitive deals and unilateral action that monopolizes or threatens to monopolize the applicable market are broadly prohibited by Sherman Antitrust Act of 1890. The law aims to stop artificial price rise by limiting trade or supply. The object of the Sherman Antitrust Act is not to shield rivals from harm from legitimately profitable undertakings.

2) The Clayton Act of 1914

Passed in 1914, the Clayton Antitrust Act continues to regulate US business practices today. The Act describes unfair practices in industry such as Price-fixing and Monopolies and upholds different labor rights.

3) The Federal Trade Commission Act of 1914

This Act prohibits unfair competitive practices and prescribes rules that identify unfair or deceptive practice for consumer harm.

----------------------------------------------------------------------------------------------------

Federal Agencies that can block a merger are:

1) The U.S. Department of Justice

2) The Federal Trade Commission

--------------------------------------------------------

A recent example: Antitrust Lawsuit against Google

• The United States Department of Justice investigated for 14 months and this finally led to an antitrust lawsuit against Google's search engine
• Rivals have long complained that Google has controlled the entire market and thus it is difficult for small or start-up companies to beat the standard of Google as it is entirely dominating
• With its Android mobile operating system and agreements that essentially forced handset makers to pre-install Google's search engine and browser on their phones
• Google has engaged in a variety of activities aimed at preserving its dominance over the search market and creating a hurdle for rivals from aquiring the market share
• Google monitor vast quantities of user data that it has obtained from the other customer-facing platforms-, Google Maps, G Suite, Google Play App Store, etc.

Conclusion

I think this was a bad decision as the vast collection of Google data on the browsing habits and preferences of users, extracted from its Ad network, causes great harm to consumers. It is not yet clear if hundreds of smaller rivals in the ad-tech market, some of which are extremely shady would be better user privacy stewards.