Legal Definitions of Monopoly

Throughout history, successive governments have imposed legal monopolies on a variety of products, including salt, iron and tobacco. The first iteration of a statutory monopoly is the Statute of Monopolies of 1623, an Act of the English Parliament. Under this Act, patents evolved from letters patent, which are written orders from a monarch that confer title on an individual or company. Illegal monopoly occurs when the main player in the market engages in exploitative or exclusive practices. Illegal monopolies strengthen their dominant position through exclusive transactions, price discrimination and tied selling. U.S. law generally considers monopolies to be harmful because they impede the channels of free competition that determine the price and quality of products and services offered to the public. As a group, monopoly holders have the power to set prices, foreclose competitors and control the market in the geographical area concerned. U.S. antitrust laws prohibit monopolies and other practices that unduly restrict competitive trade. These laws are based on the belief that equality of opportunity in the market and the free interaction of competitive forces lead to the best allocation of the nation`s economic resources. Moreover, competition is supposed to promote material progress in production and technology while preserving democratic, political and social institutions.

Economic monopolies have existed for much of human history. In England, a monopoly was originally an exclusive right expressly granted by the King or Parliament to a person or class of persons to provide services or goods. The holders of these rights, mainly English guilds or inventors, dominated the market. In the early seventeenth century, English courts began to abolish monopolies by encroaching on free trade. In 1623, Parliament enacted the Monopolies Act, which prohibited all monopolies except those expressly excluded. With the Industrial Revolution of the early nineteenth century, economic production and markets exploded. The growth of capitalism and the emphasis on free competition reinforced the idea that monopolies were illegal. In a legal monopoly, the government is able to regulate prices and provide generally accessible services/goods to the population, supervise the operation of businesses, and ideally move the monopoly so that it acts in the best interest of consumers. MONOPOLY, commercial law. This word has different meanings. 1.

It is the abuse of free trade by which one or more persons have obtained the advantage of selling alone all goods of a certain type of goods to the detriment of the public. 2.-2. All mergers between traders aimed at increasing the price of goods to the detriment of the public are also called monopolies. 3.-3. A monopoly is also an institution or permission by gift of the sovereign power of a state, by commission, letters patent or otherwise to a person or enterprise, by which the exclusive right to buy, sell, manufacture, work or use something is given. Ferry. Abr. H.T.; 3 Inst. 181. 4. The constitutions of Maryland, North Carolina, and Tennessee state that «monopolies contradict the genius of free government and should not be allowed.» Empty Art.

Copyright; Patent. A legal monopoly, also known as a legal monopoly, is a business protected by law against competitors. In other words, a legal monopoly is an enterprise that has been mandated by the government to act as a monopoly. A legal monopoly is a mandate given by the government to a sole proprietorship to operate in a particular sector or industry with absolute power to produce and supply goods and services, as well as the assurance that no other enterprise than them will participate in the enterprise. It also assists the government in regulating prices in this sector. Explains how government measures to create legal monopolies create a balance between prices and control supply and demand. n. A company or group of related companies that controls so much of the production or sale of a product or type of product in order to control the market, including pricing and distribution. Business practices, mergers and/or acquisitions that tend to create a monopoly may violate various federal laws that regulate or prohibit corporate trusts and monopolies or prohibit trade restrictions. However, the limited monopolies that a manufacturer grants to a wholesaler in a particular region are generally legal because it is a «license».

Public utilities such as electricity, gas and water companies may also hold a monopoly in a certain geographical area, as this is the only practical way to provide the public service, and they are regulated by state public utility commissions. (See: Trade Restriction, License) The Dutch East India Company, the British East India Company and similar national trading companies have been granted exclusive trading rights by their respective national governments. Private independent traders operating outside the jurisdiction of these two companies were prosecuted. Therefore, these companies fought wars in the 17th century to define and defend their monopoly territories. Now let`s look at what a legal monopoly is. Similar to a general monopoly, there is only one supplier of a good or service. However, a legal monopoly receives government support and rights, either nationally or in a specific region. In exchange for government support and rights, the government then has the right to supervise and regulate all activities, tariffs, and policies. Sometimes an industry is a natural monopoly. This type of monopoly arises from circumstances over which the monopolist has no power. A natural monopoly may exist when a market for a particular product or service is so limited that its profitable production is impossible, unless it is carried out by a single plant large enough to meet all demand. Natural monopolies are beyond the reach of antitrust law.

Industries of special interest such as agricultural and fishing marketing associations, banks and insurance companies, and export associations are also immune from antitrust laws. Major League Baseball has also been exempted from antitrust laws. The Federal Trade Commission Act of 1914 (15 U.S.C.A. §§ 41 et seq.) created the Federal Trade Commission, the regulatory agency that promotes free and fair competition in interstate commerce by prohibiting price-fixing, misleading advertising, boycotts, illegal combinations of competitors, and other methods of unfair competition. Antitrust laws prohibit the conduct of a single firm that unduly restricts competition by creating or maintaining monopoly power. Most of the claims in Article 2 relate to the conduct of a dominant company in the market, although Article 2 of the Sherman Act also prohibits monopolization attempts and monopoly conspiracies. First, the courts consider whether the company has «monopoly power» in a market. This requires a thorough review of the products sold by the leading company and any alternative products that consumers can turn to if the company tries to raise prices. Second, the courts consider whether this leadership position was acquired or maintained by inappropriate behaviour – that is, something other than a better product, superior management or a historic accident.

In this case, the courts assess the anti-competitive effects of the conduct and its pro-competitive justifications. The prevailing idea behind the introduction of legal monopolies is that if too many competitors invest in their own supply infrastructure, prices in a particular industry would reach unreasonably high levels. Although this idea is justified, it does not last indefinitely, because in most cases capitalism ends up triumphing over legal monopolies. As technologies advance and economies evolve, the rules of the game tend to stabilize on their own.