Introduction to Monopoly
Monopoly is a market situation in which a single company or entity has complete control over the production or distribution of a particular service or product without significant competition. Simply put, one single seller sells unique products without substitutes or competitors. The seller enjoys the power of setting the prices according to their own wish. There are several monopoly examples from different industries.
Monopoly Examples Types
A business can have a monopoly in various ways. We have given a few such situations below:
1. Natural Monopoly: It is a situation where it is best if only one seller makes and sells a product. It also has many barriers to entry into the market.
Example: The most familiar examples are the oil and gas, railway, and aviation industries.
2. Geographical Monopoly: It is when there are no other sellers available in that part of the world.
Example: A local cable servicing company has a monopoly in a particular area in a city.
3. Technological Monopoly: It is when a company or business has access or exclusive rights over a technology or manufacturing method that no one else can use.
Example: Pharmaceutical companies with patents for certain medicines can fall under technological monopoly examples.
4. Government Monopoly: It is a monopoly where the government owns and controls a particular industry, sector, or business.
Example: Water supply, electricity distribution, and mail services are prominent examples of government monopoly.
Monopoly Examples
Below are the different Monopoly Examples:
Example #1: Google
Google has a significant market share in the internet industry compared to its competitors, such as Microsoft and Yahoo. Thus, it is a superior player in the industry.
The company’s primary source of revenue is advertising, and it currently controls a striking portion of the global advertising revenue, estimated to be around $224.47 billion in 2023.
Its business model heavily relies on collecting user data to personalize ads based on the user’s search history and location. It gives Google an advantage over smaller advertisers who do not have access to the same level of user data. Therefore, Google undoubtedly is one of the giant monopolies in the world, with a notable presence in several other markets as well.
Example #2: Microsoft
Microsoft has enjoyed a monopoly in the computer and technology industry since 1999. Even today, Microsoft enjoys dominance in the market, recording $51.9 billion in revenue in Q4 2022.
With the cloud computing platform Microsoft Azure, Microsoft has maintained its presence and dominance in the market. Moreover, Microsoft bundled its Internet Explorer web browser with Windows operating system to become the preferred desktop in every household.
Example #3: Facebook
Facebook dominates the social media market as the leader, with 2,958 million monthly users (as of January 2023).
It is simply a monopoly due to its lack of direct competition, strong pricing power, and dominant user base worldwide. In 2014, Facebook acquired WhatsApp, a rising competitor in the social media segment, further solidifying its monopoly status. As such, Facebook is a clear example of a monopoly in the social media market.
Example #4: Alibaba
Alibaba is a China-Based business that is one of the few retailers monopolizing global e-commerce. It owns various online platforms such as Taobao, Tmall, and other e-commerce sites.
It allows the company to control a large portion of online sales in China, which gives it the dominant position and makes it a monopoly. Alibaba now has control over things like product prices and transactional details.
Example #5: VISA
In today’s market, businesses thrive on Visa as consumers prefer credit cards over cash payments. As per the Fed Report 2021, 57% of US consumers prefer plastic, and 20% to cash. Merchants and retailers in the US paid $62.5 billion in swipe fees last year. It is prevalent in over 200 countries among individuals, merchants, consumers, governments, and institutions.
Visa does not issue debit or credit cards but provides services in debit, credit, and prepaid cards to businesses and consumers. Visa’s clients give the cards, while it works like a mediator and profits by selling to merchants and financial institutions.
Example #6: Indian Railways
The Indian Railways enjoys a government-controlled monopoly, being the sole seller and the world’s fourth-largest railway network. It also dominates the railway industry from ticketing to catering facilities across 64,000 route km.
There is no substitute for government-owned railways as it has no transportation and food facilities competition. It is the only player in the mobile catering business through pantry cars in trains, static catering with established plazas, fast food units, and cell and base kitchens. Thus, all this contributes to its domination in the market.
Example #7: De Beers
The best example of a resource control monopoly is De Beers. De Beers Consolidated Mines came about in South Africa around 1888 as a union of various diamond mining entities.
De Beers enjoyed a monopoly in the 20th century in the diamond market and used its presence to influence the international scenario. It expanded, convincing individual miners to join. When the competitors refused to join, it swamped the market with similar productions. To regulate the prices through supply, it purchased diamonds from other manufacturers.
De Beers’ business fell to 40% from 90% when producers from Canada, Russia, and Australia used different channels to distribute diamonds. The awareness of blood diamonds also contributed to declining sales.
Example #8: Carnegie Steel Company
Carnegie Steel Company, founded by Andrew Carnegie and later merged into US Steel, maintained a monopoly over steel supply in the late 19th and early 20th centuries.
It enabled the company to dictate the price of steel without market competition. They vertically integrated the company meaning controlling the entire production process from barges to mills, mines, and transportation.
Example #9: Luxottica
Luxottica, the world’s most prominent glasses (eyewear) manufacturer, was founded in 1961 in one of the small villages in Italy. Since the 1980s, the company has expanded globally and acquired other eyewear companies whenever feasible, including well-known sunglasses brands such as Ray-Ban, Vogue, Killer Loop, T3, Armani, etc.
It has also controlled the leading vision care providers in the United States, such as Eye Med and Vision Care. All this makes an example of a monopoly.
Final Thoughts
Lawmakers have enacted antitrust laws to prevent monopolies from engaging in anticompetitive behavior. These antitrust laws help prohibit the practice of restraining trade and allowing free trade and competition in the market, thus protecting the consumers.
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