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MonopoliesA monopoly is a market structure in which one supplier with no close competitors dominates the entire market for a good or service. Under US antitrust laws that date back to 1890, companies that command a market and engage in any behavior that discourages competition are considered monopolies. The case for regulating monopolies includes three main points: price efficiency, innovation, and consumer protection. Without market competition, monopolistic firms have unchecked power to set prices without considering a consumer's actual willingness to pay. As a result, prices are often higher than is efficient for that market. Similarly, competition incentivizes innovation—in order to remain competitive, firms must continue developing new or better goods and services. Monopolies aren't inherently good or bad. Some monopolies, like power companies, are the natural result of high barriers to entry in a market. Other monopolies, like the Rockefeller family's infamous Standard Oil, had to be broken up after corrupt business practices manufactured those barriers to entry. Ultimately, the decision to regulate monopolies comes down to how firms handle competition in the market.Explore Monopolies

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Patents arguably grant inventors monopolies for a short period of timeAs a way to reward innovation, the government grants short-term monopolies on patented products. Patents block other companies from producing or selling that product, giving inventors the rights and opportunity to establish themselves in a market before other competitors enter. Econlib Watch how American monopolies used vertical and horizontal integration strategies to command marketsVertical integration occurs when a company controls the entire manufacturing or development process, whereas horizontal integration involves expanding a company's market share. Both strategies have been used by US monopolies to establish dominance in markets. NBC News Utility companies are often considered 'natural' monopoliesNatural monopolies occur in industries where the upfront costs of entering the market are high, making competition unrealistic. Investor-owned power companies, like Duke Energy, often have natural monopolies, as building alternative power grids and transmission lines is too expensive and impractical for competitors. KBIA Explore a list of well-known monopoliesMany American monopolies popped up during the rapid industrial growth of the Gilded Age. Industries like steel, tobacco, railroads, and telecommunication have all been monopolized at some point in history. Investopedia Monopolies are considered the most extreme form of imperfect competitionTrue monopolistic companies face no competition, meaning there aren't any near substitutes for the goods or services the company provides. Often, no competition exists because the monopoly is either approved by the government or the barrier to entry is costly. Federal Reserve Bank of St. Louis An overview of monopolies, when one company controls an entire marketIn the business world, a monopoly exists when one company controls the entire market. Regulators take issue with monopolies because they have been found to limit consumer choices, raise prices, and hurt competition. The Motley Fool A 'bilateral monopoly' occurs when there's one supplier and one buyer in a marketBilateral monopolies are often used to conceptualize labor markets in small towns. Using this concept, large employers have a monopoly over the labor market, while workers have a monopsony as the only available laborers. USLegal Read the Federal Trade Commission's legal definition of a monopolyThe Federal Trade Commission and the US Department of Justice (DOJ) Antitrust Division are the regulatory agencies responsible for overseeing antitrust laws. Before deeming any company a monopoly or acknowledging monopolistic power in a market, the FTC conducts thorough research into market competition, price, and even other competitors' business practices. Federal Trade Commission The prototype for Tinder was created during a 2012 hackathonBy August 2012, Tinder, which was originally called Match Box, had launched on the Apple App Store. Match Group merged Tinder into its portfolio in 2017, the same year it set its sights on acquiring Hinge. Experts say that Match has not been declared a monopoly in part because monopolies are "hard to prove." Business Insider Legendary venture capitalist Peter Thiel once wrote that 'competition is for losers'With Peter Thiel's "Monopoly Theory," the Founders Fund partner argued that investing in companies that create new categories, rather than those that compete with other businesses in existing ones, is a best practice in venture capital. Knowledge at Wharton Read about the history of the Sherman Antitrust Act, the first law to ban monopolistic behaviorIn its later years, Standard Oil formed a business trust that reflected the company's exponential growth. Politicians wanted to prevent such trusts and used the Sherman Antitrust Act to force Standard Oil to break up. National Archives Robber barons, the monopolistic business people of the 19th century, explained“Robber baron” was a term used to describe 19th-century businesspeople who engaged in monopolistic business practices and didn’t face much business regulation, resulting in significant wealth. ThoughtCo Modern antitrust law was created to combat the Standard Oil TrustJohn D. Rockefeller's Standard Oil Trust enabled him to evade laws against a single corporation buying stock in another. His centralized board of directors held stock in many different oil companies under his control, allowing Rockefeller to eventually monopolize the oil refining industry. Efforts to regulate and prevent the Standard Oil Trust's monopoly became known as "antitrust" laws. Quartz The first ever IPO was issued by the Dutch East India Co., a spice companyIt first offered shares to the public in the 1600s on the Amsterdam Stock Exchange to help finance its passages. The Dutch East India Co. succeeded in part due to its monopolistic hold over the East Indies at the time. Investopedia In 2020, the US DOJ sued Google for unlawful monopolization of the search engine marketThe US Department of Justice and numerous states accused Google of making exclusionary agreements with Android phone manufacturers to make its search engine the default on those devices, preventing competitors from gaining market share. UW School of Law

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