Lecture Extender Examples 581
Chapter 27 Regulation and Antitrust Policy in a Globalized Economy
Why This Cigarette Manufacturer Wants to Be Regulated
During the 1990s, the Food and Drug Administration (FDA) launched preliminary efforts to convince
Congress to grant the FDA the authority to regulate the manufacture and sale of cigarettes. FDA officials
argued that it should have this power because nicotine, a key ingredient in cigarettes, is an addictive drug.
Initially, tobacco companies unanimously responded by denying that nicotine is addictive.
Vying to Offer VOIP
transformed into digital packets of information and transported across the Internet much like e-mail. The
-connected
phone service. At first, the main adopters were businesses for internal communications. VOIP began to
In the market for personal computer (PC) software, Microsoft is the dominant firm with a market share in
productivity software market is just over 95 percent. Thus by the standard rule of thumb for gauging
market power, a market share of 70 percent or more, Microsoft possesses this power in two separate
markets.
582 Miller Economics Today, Nineteenth Edition
Conflicting Social Regulations in a World of Multinational Firms
The Data Protection Directive took effect in October 1998 in all nations of the European Union. This law
governs how firms collect and export personal data about European citizens. Under the directive, any
information about them, disclose how they will use the information, and reveal why it is being collected.
European backers of the law argue that it protects consumers against Big Brother-style corporate
intrusion. For U.S. multinational firms, however, the law is a headache. The European requirements run
counter to standard U.S. business practices in the United States, where it is relatively common to gather
Regulation in the Milk Market
An industry that has been heavily regulated for many years is the dairy industry. The 1937 Agricultural
Adjustment Act (AAA) provided for federal control over the marketing of fluid milk (as opposed to milk
used in the manufacture of cheese). Today, the AAA still allows the producers of fluid milk to the public
to force marketing controls on dairies and bottlers. The federal government controls more than 60 percent
How Utility Pricing Regulations May Lead to Power Outages
During the weeks and months following the widespread power blackout affecting millions of people in
the Northeast on August 14, 2003, regulators began to rethink their methods of regulating electricity
prices. In many locales, regulators using rate-of-return and cost-of-service regulation had allowed utilities
