Definition and Characteristics of a Monopoly
Monopolization of the market is a dangerous tendency that might have adverse effects on competition and the quality of provided services. Thus, a monopoly can be defined as a business that has no competitors within the market or industry, and that cannot be replaced by other substitutes (Mankiw 269). As a result, it acquires the power to establish prices and impact the emergence and development of trends within the market.
Google’s Market Power and Business Practices
Thus, Google can currently be viewed as a monopoly that dominates the sphere of the Internet, digital advertising, and search. The corporation acquired essential tools necessary for delivering ads to publishers (Department of Justice). As a result, the company controls and owns around 30% of the income coming from advertising (Department of Justice). It leads to the unfair distribution of power within the sphere and the emergence of a monopoly.
Overview of the Sherman Antitrust Act
Furthermore, it is possible to state that Google violates existing antitrust laws such as the Sherman Act. The document was established in 1890 as the framework for observing economic liberty and preserving free and fair competition (“Sherman Antitrust Act (1890)”). However, the U.S. government sues Google for monopolizing the digital advertising technology market and violating the Sherman Act’s major assumptions (Department of Justice). For instance, section 2 of the document makes any attempt to monopolize or conspire with any person, any part of the trade or commerce illegal (“Sherman Antitrust Act (1890)”). The wrongdoer should be considered guilty of misbehavior and punished following the existing laws (“Sherman Antitrust Act (1890)”).
Google’s Violations of the Sherman Act
At the moment, Google’s actions contradict this statement as the corporation controls the bulk of digital advertising technologies. It was gained as a result of purchases or deals with smaller firms. In such a way, Google can be viewed as an example of a monopoly existing in the modern world.
Works Cited
Department of Justice. “Justice Department Sues Google for Monopolizing Digital Advertising Technologies.” Justice. 2023. Web.
Mankiw, Gregory. Essentials of Economics. 9th ed., Cengage Learning, 2020.
“Sherman Anti-Trust Act (1890).” National Archives. Web.