According to Cabrales &Gottardi (2014), the current trends in the global business environment have resulted in increased monopoly behavior. There is increased dynamism and advanced technology coupled with innovation thus monopolistic activities have become very common. A monopoly is often characterized by a singles seller who controls the market; as such, there could be positive or negative impacts of having one firm controlling a particular product (Taylor, Greenlaw, & Dodge, 2016). But then, there have been cases of unfair and cut-throat competition, collusions, and many other ill monopolistic behavior leading to justice systems to come in and impose regulations that aim at efficiency in the monopoly market. Therefore, this paper sheds light on some of the current key activities that The US Department of Justice has been involved in to regulate monopolies.
In 2015, the Department of Justice filed a lawsuit against United Airlines to stop its intentions of purchasing and acquiring over 24 slots at Newark’s Liberty Airport. The airline would almost completely take control of all slots of taking off and landing at the airport with their strategic move of increasing their share at the airport. The move by the Department of Justice aimed at preventing a monopoly at the airport that could affect air travelers who use the airport. Having 73% of the Newark Airport’s take-off and landing authorizations slots already, the intended acquisition would enable the airline to get 75% share hence contravening Sherman’s act which provides that it is a crime to monopolize a part or a whole of interstate commerce. An increased share of the airport facilities would inflate the prices and reduce travel options for air travelers using Newark Airport. The suit was successful as the Airline finally decided to quit its acquisition mission in 2016; hence, a success by the Department of Justice to regulate monopolistic activities in the business environment (“United Airlines Abandons Attempt to Enhance its Monopoly at Newark Liberty International Airport”, 2016).
Then again, the Department of Justice recently files a litigation to stop a purported giant acquisition of T-Mobile USA by AT & T. The latter was seeking to widen its telecommunications services in the US market whereby the acquisition was estimated to be over a whopping $39 billion. The Justice Department considered that the move could result in adverse monopolistic effects in the mobiles services industry in the country. The existing competition has been benefiting mobile services consumers through improved quality service and availability of more operator choices. However, the intended acquisition would lead to reduced competition, reduced innovation, and poor quality services than before. The Department of Justice’s move is grounded on the ground that AT & T is going to contravene the country’s anti-trust laws that do not allow a party to monopolize interstate commerce (“Justice Department Files Antitrust Lawsuit to Block AT&T’s Acquisition of T-Mobile”, 2016).
In conclusion, the justice department has been important in identifying monopolistic behaviors in advance and seeking relevant measures to stop them. Through the anti-trust laws, the department has always found ground to bring sanity into the business environment by eliminating collusions and unfair competition. As evidenced by the two recent activities by the department, consumers of various products or services would be under a serious threat if there were no anti-trust laws and the justice department to identify flaws in business activities especially concerning competition. United Airlines and AT &T companies would have gotten away with it leading to a possible unhealthy competition and reduced quality in services if it was not for the prompt move by the Justice Department.
Cabrales, A., & Gottardi, P. (2014). Markets for information: of inefficient firewalls and efficient monopolies. Games and economic behavior, 83, 24-44.
Justice Department Files Antitrust Lawsuit to Block AT&T’s Acquisition of T-Mobile. (2016). Justice.gov. Retrieved 17 November 2016, from https://www.justice.gov/opa/pr/justice-department-files-antitrust-lawsuit-block-att-s-acquisition-t-mobile
Taylor, T., Greenlaw, S., & Dodge, E. (2016). Principles of macroeconomics (1st ed.).
United Airlines Abandons Attempt to Enhance its Monopoly at Newark Liberty International Airport. (2016). Justice.gov. Retrieved 17 November 2016, from https://www.justice.gov/opa/pr/united-airlines-abandons-attempt-enhance-its-monopoly-newark-liberty-international-airport