Monopoly and Violation of Anti-Trust Law - Research Proposal Example

Download file to see previous pages The paper "Monopoly and Violation of Anti-Trust Law" is a great example of a research proposal on the law. A monopoly in a particular industry occurs when the following scenarios happen: (1) smaller or higher level of minimum efficient scale or MES, (2) firms conspiring together to control supply and (2) historical market dominance of certain firm(s). MES refers to the amount of production that reduces cost in relation to the volume of demand from the market. The technology used in production is significant to affect the levels of cost and production of the firm which will determine whether it will operate competitively or monopolistically in the market. (Varian, 1999: 427-428)

Industrial organizations having a monopoly of the market can practice price discrimination and offer product bundles to ensure the optimum sale of its products thus maximizing profit. Price discrimination is the practice of companies to sell different volumes of products at different prices while product bundles are “packages of related goods offered for sale together” (Varian, 1999: 444). Software bundles, commonly known as a “software suite” (Varian, 1999:444), are one clear example of product bundles wherein a software company offers different types of software tools that are put in one package.

Product bundling is exactly the main issue that the United States Department of Justice (DOJ) in the case it lodged against Microsoft Corporation on May 18, 1998, with the contention that it exploited its monopolistic power in the market “by bundling its internet explorer web browser with its Microsoft Windows operating system” (Wikipedia) which resulted to its success to dominate the web browser industry pushing other software companies out of the competition.

The federal government of the United States of America implements an anti-trust law that aims to prevent the monopolistic approach of certain companies that prevents the free flow of market competition where firms can compete freely against each other through product innovations, prices, and services to attract demands from consumers. Thus, it ensures to protect consumers in the end through “lower prices and better products and services” (US Department of Justice Anti-Trust Division) as a result of free competition among firms servicing the industry.

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