Final answer:
The situation described with Chrome Inc. is an example of disruptive innovation, where a new technology causes a significant shift in the market, affecting consumer behavior and putting pressure on existing competitors.
Step-by-step explanation:
The scenario where Chrome Inc. creates a new application allowing users to make free calls through the Internet, leading to an increase in their paid subscribers and causing their competitors to lose customers, exemplifies a disruptive innovation.
A disruptive innovation is a new technology or service that significantly alters the business landscape, often leading to a redefinition of the market and creating a shift in consumer preferences. Chrome Inc.'s application disrupted the traditional telecommunication market, where services were typically paid. Furthermore, their competitors who were dependent on fees for services found their business model under threat, showing the ripple effect of such innovations on existing market dynamics. This case also underlines the importance of the Federal Communications Commission and federal government's decisions regarding regulation of broadband providers and ensuring a fair competitive landscape without creating a divide among the Internet users.