Apply the Principle: Monopoly Power

By now you know that monopoly power occurs in most markets. You also know that in some cases a regulated monopoly produces a better outcome than a “natural monopoly.” Yet an inappropriate use of monopoly power is the basis for an anti-trust decision. The question remains: When does a firm have too much monopoly power?

In this “Apply the Principle,” you will have to decide if Google has too much monopoly power.

Read the following New York Times article: Google Fined Record $2.7 Billion in E.U. Antitrust Ruling

Answer the questions before.

Based on what you read, do you think Google is a harmful monopoly that should be subject to U.S. anti-trust action? Explain.

Do monopoly powers harm an economy? How so?

Why is some degree of monopoly power permitted?