Monopoly Examples

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Blog Author :

WallStreetMojo Team

Edited by :

Ashish Kumar Srivastav

Reviewed by :

Dheeraj Vaidya, CFA, FRM

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Monopoly Meaning

Monopoly examples refer to companies that possess exclusivity in the area of trade, service, or production in the market. They have no competitors in their field of work that helps them enjoy privileges such as constant demand, pricing power, and other such benefits. However, these companies could lead to unfair trading practices that disallow other players to enter their space.

Monopoly Examples

A monopoly example company creates multiple barriers to substitute products and services and prevents new players to enter the market. It is also found that a majority of monopolies in the utility sector of the market are owned and operated by government or government agencies. In a free market, these types of companies are restricted as they do not provide a free choice for consumers.

Table of Contents
  • Monopoly examples include various monopolistic businesses that exist in theory and practice.
  • Examples of real-life monopolies include Luxottica, Microsoft, AB InBev, Google, Patents, AT&T, Facebook, and railways.
  • Monopolies are a common feature of capitalist economies, but governments must ensure that these companies do not exploit their position to impose high rates for goods and services.
  • To prevent monopolistic pricing, governments have created laws regulating these companies' behavior. These laws promote competition in the market, which can lead to lower prices and greater innovation.

Monopoly Examples Explained

Monopoly examples refer to the companies that have the sole operating authority within a particular section of the market. They eliminate substitute products or services by placing multiple barriers to entry in the market.

While monopolies are common in the capitalist economy, governments check that they do not take advantage of this and charge the customers high rates for their goods and services. Moral laws are made to verify the monopolistic prices of the companies. In addition, governments have made antitrust laws to protect consumers from the predatory behavior of monopolistic companies.

In a free market, however, these companies are restricted as they do not provide a free choice for consumers and their predatory trade practices disallow the liberal nature of a free market. Multiple countries across the globe have placed restrictions against these companies from controlling a section of the market and using that control to exploit their customers.

It should also be taken into consideration that most monopolistic companies in the utility sector are government-run. These companies’ monopoly example economics is not to make exorbitant profits but to ensure services are provided at reasonable rates for their citizens.

Video Explanation of Monopoly Examples

 

Top 8 Examples

Let us understand the concept of a monopoly example company with the help of the top 8 examples of such companies across the world and sectors through the discussion below.

Example #1 - Railways

The government provides public services like the railways. Hence, they are a monopolist because new partners or privately held companies are not allowed to run railways. However, the price of the tickets is reasonable so most people can use public transport.

Example #2 - Luxottica

Luxottica - A company that owns all the major brands of sunglasses. The company has bought almost all the major eyewear brands. However, they are still named differently. It creates an illusion in the customer's mind that they have a variety of sunglasses to choose from, although they are all manufactured by one company. Luxottica produces more than 80% of the eyewear worldwide, directly or indirectly.

Example #3 -Microsoft

Microsoft – Microsoft is a computer and software manufacturing Company. It holds more than 75% market share and is the tech space's market leader and virtual monopolist.

Example #4 - AB InBev

AB InBev – A company formed by the merger of Anheuser-Busch and InBev distributes over 200 types of beer, including Budweiser, Corona, Beck’s, etc. While these beer names are different and have different compositions to give a different taste, they belong to a single company. So, when people consume different Beers, they are paying a single company in a sense.

Example #5 – Google

Google has become a household name and whenever we don’t know any answer, probably googling is the answer. With their secret algorithm, the biggest web searcher controls more than 70% market share. In addition, the company has grown into a web of services interlinked like maps, Gmail, search engines, etc. As a result, the company has left its competitors – Yahoo and Microsoft- behind its innovation and technological advancement.

Example #6 – Patents

Patents provide a legal monopoly to a company, albeit for a short period. When the patent is in force, no other company can use its invention for its purposes. For example, a casino in Genting Highlands, Malaysia, held an exclusive patent for legalized casino, and it enjoyed a legal monopoly for years in Malaysia.

Example #7 – AT&T

In 1982, AT&T, a telecommunications firm, was the sole supplier of telephone services across the U.S., which was violating the antitrust laws. Due to its monopolistic activities for service as essential telecommunication, the company was forced to split into six subsidiaries called "Baby Bells."

Example #8 – Facebook

Social media is the new market in the current century. While the users are offered free services, the companies earn from the advertising revenue. With its huge portion of the market share, Facebook almost has a monopoly in this business. The company is ahead of all its competitors like Google+, Twitter, etc. It has seen organic growth in users and social media advertisers and acquisition of other companies like Whatsapp, Oculus Rift, etc. The company is so big that they recently charged it with affecting the users' sentiments on how the elections are fought and incline them towards a single person or a party.

It also ended up acquiring its competitors such as WhatsApp and Instagram to form a conglomerate of social media apps called Meta.

Frequently Asked Questions (FAQs)

1. What are some examples of technological monopolies? 

Examples of technological monopolies include companies such as Microsoft and Apple, which have dominated the computer software and hardware markets, respectively. Other examples include Google in the search engine market and Facebook in the social media market.

2. Can you give some examples of geographic monopolies?

Geographic monopolies are typically found in industries with significant entry barriers, such as transportation or utilities. Examples of geographic monopolies in the United States include local utility companies, cable and internet providers, and regional airlines.

3. What are some examples of UK monopolies? 

Some examples of UK monopolies include British Telecommunications (BT), which has long been the dominant provider of telephone and internet services in the UK, and Royal Mail, which until recently had a monopoly on mail delivery services. In addition to BT and Royal Mail, other UK monopolies include Network Rail, which manages the UK's railway infrastructure, and Thames Water, which provides water and wastewater services to the Greater London area.