Introduction This article will briefly examine the effects of firms with market power on economic well-being. The first part outlines some of the negative effects of market power; the latter exemplifies some of the benefits of market power, and the case of Microsoft is used to support these arguments. In conclusion, an overview of the role of competition authorities and competition policy is made. Why is market power harmful to economic well-being? Companies with market power or monopolies are often seen as harmful to customers and economic well-being. According to neoclassical theory, the market power of monopolies and oligopolies is potentially superior to that of monopolistically or perfectly competitive firms because they face very limited, if any, competition (Ferguson and Ferguson 1994). In monopolistic or perfect competition it is possible to make exceptional short-term profits, but eventually other firms will enter the market and offer alternative products that reduce demand for the established firm's products (Sloman et al., 2013 p. 177). Otherwise, this is not the case for dominant firms or monopolies; the lack of competition allows them to set prices and make extraordinary profits, increasing the perception that big companies are “bad” for consumers. As shown by the graphs in Figures 1 and 2, there are substantial differences in competitive and monopolistic markets. In a competitive environment, equilibrium is achieved where demand meets supply. In a monopolistic market, by setting higher prices and producing smaller quantities, monopolies or dominant firms make supernatural profits; furthermore, there is a deadweight loss and some consumers who were willing to pay lower prices will want... half the paper...ur; in these cases, competition authorities must act to combat illegal practices that are harmful to economic well-being. References ECIS (2009) Microsoft: A History of Anticompetitive Behavior and Consumer Harm http://www.ecis.eu/documents/Finalversion_Consumerchoicepaper.pdfEuropean Union Competition Law http://ec.europa.eu/competition/antitrust/legislation/ handbook_vol_1_en.pdf Ferguson, P.R., Ferguson, G.J. (1994) Industrial Economics: Issues and Prospects, 2nd ed., MacmillanPosner, R.A., (1975) The Social Costs of Monopoly and Regulation, The Journal of Political Economy, vol. 83, No. 4, pp. 807-828, The University of Chicago PressSloman, J., Hinde, K. and Garratt D. (2013) Economics for Business, 6th ed., Prentice Hall / Pearson,Veljanovski, C. (2006) Cartel Economics. Finnish Association for Competition Law, Konkurrenstrattslig Arsbok