monopoly

A monopoly occurs when a single company holds significant market power within an industry, limiting competitors from entering or succeeding against them. When there is a monopoly, alternative products and companies are unavailable to consumers. This causes purchasers to be forced to pay the prices established by the single company. Without substitutes or alternatives, consumers must accept the quality of content available to them.

Companies can become monopolies by controlling the entire supply chain via vertical integration, which means they control the product’s creation from production to distribution and exhibition. A company can also become a monopoly through horizontal integration, which refers to when a company is the sole competitor in a particular sphere of the industry, which could be at the production, distribution, or exhibition level.

In the late nineteenth and early twentieth century, Standard Oil and American Tobacco acted as monopolies in their respective industries. These companies were eventually reorganized due to the 1890 Sherman Antitrust Act, which worked to eliminate monopoly control that dictated market power.