Antitrust laws (Essay Sample)

ANTITRUST INVESTIGATION
Name
Institution
ANTITRUST INVESTIGATION
Antitrust laws originated in the United states in the late 19th century when very few companies dominated the country’s economy resulting to an economy that was controlled by monopoly and trust corporations. This paper analyses an antitrust investigation of the merger between the U.S Airways and American Airlines. This behaviour is captured in the U.S. Antitrust laws and regulations that are founded on the Sherman Antitrust Act of 1890 (Killingsworth, 2010)
The main reason that led to the investigation of the antitrust behaviour in the merger was the possibility of the merger substantially affecting competition in the market as well as consumer prices. This is because they would be in a position of dominating major airline routes, create a regional stronghold in major airports in the country, and waste away smaller airlines, which are very important in the country (Weissmann, 2013). This was proposed as the merger would result to market leader in the U.S aviation industry with 20 percent market share and a high possibility of dominance.
Some of the common costs associated with antitrust behaviour are limited customer boycotts, territories allocating limiting competition, and price-fixing limiting customer bargaining power. The fact that the airlines will form the world largest airline service provider will mean that it has the power to influence the aviation industry not only in the United States, but also globally. This means that the bargaining power of consumers will be greatly reduced limiting price and service regulatory processes such as boycotts (Killingsworth, 2010).
From the analysis, monopolies and oligopolies are not always bad for society. This is so since some monopolies have proven to be fruitful in terms of reducing costs of goods and services through economies of scale. For instance, Walmart dominates the US grocery market and has resulted to reduced grocery prices in the recent years as opposed to the days when many independent players were involved in the business (Weissmann, 2013). At the same time, Google is a well known search engine that dominates the whole world (Cassidy, 2013). Its ability to dominate the world allows it to provide important products and services to customers such as android operating system, Google earth, and email free of charge.
References
Cassidy, J. (2013). Why the Feds Should Have Been Tougher on Google. Retrieved from HYPERLINK "/onl...