Competition, Conglomerates, and Google

1. Google agreed to acquire ITA Software, a flight-information software company, for $700 million in cash, outmaneuvering other potential bidders in a deal likely to bring fresh antitrust scrutiny to the Web giant. Google said the acquisition of ITA, a closely held company that specializes in organizing airline data such as flight times, availability and prices, will allow it to create new flight search tools to help people find better flight information more easily on the Web." (Retrieved from http://solutions.dowjones.com/tnt/assets/scottrade/morningbriefing.html on July 2, 2010)

We, as a society, need to be careful about an overly large concentration of production for many goods and services in the hands of only a few firms due to the adverse affects of pricing issues in the wake of disruption to the normal competitive process inherent with traditional supply and demand economics.

a) What are the differences among horizontal, vertical, and conglomerate mergers?

b) What do you think the U.S. government view will be for this proposed Google acquisition?

2. Consider international aspects of microeconomics.

a) What is the stance of other developed countries on this issue?

b) Are there any exs where other counties are more restrictive of anti-competitive sanctions against large powerful businesses? What about the other way around; are there countries who don't seem to care about maintaining a high level of competition?