Is it illegal to own a monopoly?

[Jordon g]

Yes it is. The government will stop you if you try.

[ICQ 378838358]

I think Congress forgot about that once that broke up the big phone company at&t and made them sell off into baby bells. I see monoploy every day the gas prices being the same all over town. Once someone gives the call you notice they all change. The Feds should look into that.

[loudstage657]

Monopolies are generally discouraged because when multiple companies fight for a market share they create competition. Competition creates lower prices and better products. If there was just one company in one area of commerce that company could A) buy up any competitors because of its sheer size and power and B) dictate the price to unfair levels.

Nowadays monopolies are broken up into smaller companies, Bell is a good example of a recent monopoly. It's not necessarily illegal like most laws are, no one goes to jail or anything, the company just can't be a monopoly anymore.

[stoicchief]

illegal...most "monopolies" today do not have a complete hold of the media or industry they work in

For example: When Sirius Radio and XM Radio combined it was seen as a monopoly, but the fact that regular radio stations, CD's, and mp3's are still readily available it does not qualify as a true monopoly.

[leegleze]

Yes, it is illegal in the USA to operate a monopoly. One of the famous recent cases with this issue was The United States of America vs. Microsoft Corp. The actual case findings are found in the documents at the link below. It may be a little too much legalese for some, but this is the direct source. Perhaps your teacher can help you read through it.

[silvercharm516]

Generally, it is illegal to create a monopoly. However, there are specific situations when a monopoly is allowed and subsequently government regulated.

Utilities are a prime example. Gas, Electric, etc. The startup cost for another company to enter the market would be astronomical and would not work. In this situation, the government regulates the monopoly and tells them what they can charge for their services. Remember back to the days when AT&T was a monopoly on phone service. The market for that has changed with the invention of the mobile phone, but at one time they were a government-regulated monopoly.

Then you have to weigh things versus the old saying "If you build a better mousetrap, the people will buy it." If you create a product so good that through no effort of your own causes every competing product to go out of business, you did not behave in a non-competitive manner and are not considered to be a monopoly (because other products can always enter the market). But if you behave in a non-competitive manner such as exclusive contracts, prohibited pricing tactics or other things, your monopoly can and will be broken up. (Think about IE from Microsoft. They give it away "free" with windows which can price competitors out of the market unfairly and they've possibly illegally tied it to their operating system.)