ANTITRUST
Economics
Antitrust practices and market power:
Technology, social networking sites, and anti-competitive behavior
Q1.Why was/were the firm(s) investigated for antitrust behavior?
IBM, AT&T, Microsoft, Intel, Google, Twitter, and Facebook are all technology companies that have been accused of operating as de facto and de jure monopolies: in other words, of engaging in blatant violations of the Sherman Antitrust Act or of substantially limiting market competition to such a degree that a monopoly has been created and consumer choice has been limited in a negative fashion. "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). This paper will specifically profile Facebook, the social networking site accused of anticompetitive behavior.
Q2.Identify some of the costs (pecuniary and nonpecuniary) associated with the antitrust behavior
Social costs include forcing people to become 'locked into' a service they do not necessarily feel provides them with the services they require. However, Facebook does not operate like a traditional company and thus not like a traditional monopoly The difficulty with proving that a company is a monopoly lies in the fact that technology companies, specifically social networking companies, have a rather amorphous characterization, in contrast to conventional definitions of what a product, industry, and company constitute. For example, Facebook is...
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