Home Monopolization A Look Into Attempts to Monopolize

A Look Into Attempts to Monopolize

Introduction

A monopoly is a single entity that controls the entire market of a product or service. When one company becomes the sole provider of a particular good or service, it can exert substantial influence over pricing and other market factors. Due to this concentration of power, monopoly is considered to be a potentially damaging phenomenon that can lead to consumer loss and reduced competition. In this article, we will explore attempts to monopolize, their effects, and how the law deals with such attempts.

What is Attempt to Monopolize?

An attempt to monopolize is any effort by a company or group of companies to acquire or maintain a monopoly in a particular market. This can be achieved through various means, including predatory pricing, exclusionary practices, acquisition of competitors, and control over essential resources or patents. While having a large market share is not illegal, when a company uses its dominance to harm competition, it can be considered an attempt to monopolize.

Effects of Attempt to Monopolize

The effects of an attempt to monopolize can be disastrous for the market. With only one or a few companies in control, consumers can end up paying inflated prices and have limited selection, which hurts both the public and other businesses. Control over a market can also allow a company to leverage its power beyond that market, potentially engaging in unfair trade practices and unmanageable risk-taking behavior.

Legal Framework

The Sherman Antitrust Act of 1890, together with its subsequent amendments such as the Clayton Antitrust Act of 1914, were created to combat attempts to monopolize. The law prohibits any acts that lead to a monopolization of the market, which includes both actual monopolies and attempts to monopolize markets.

Antitrust laws allow authorities to initiate legal action to prevent or stop attempts to monopolize. The Federal Trade Commission and the Department of Justice have the responsibility of enforcing federal antitrust laws, as well as investigating and prosecuting market abuses. If found guilty, companies that attempt monopolizing face severe fines, forced divestiture, and other legal remedies.

Examples of Attempts to Monopolize

Several companies over the years have found themselves in hot water for their attempts to monopolize markets. Microsoft, for instance, received antitrust lawsuits in the late 1990s over its inclusion of the Internet Explorer browser on Windows computers, thereby making it challenging for other browsers to compete. Another example is the Standard Oil Company, which eventually became a monopoly on crude oil refining in the United States, leading to its being broken up into several smaller companies.

Conclusion

Attempts to monopolize can have severe impacts on market economy and commerce, leading to fewer choices and higher prices. The government’s efforts to prevent monopolies and abuse of market power through antitrust laws and regulators seek to ensure fair competition and consumer protection. Companies that engage in attempts to monopolize should be prepared for severe legal consequences as the authorities seek to prevent, prosecute and terminate them.


The Sherman Antitrust Act of 1890, which has been employed many a time in Federal courts across the country, seeks to promote free market interstate trade thereby making an effort to limit market restraints. Section 2 of the Sherman Act addresses an individual’s role in what can now be considered illegal business activities.

An attempt to monopolize a market is one of the chief concerns of Section 2 and puts the responsibility of such an act on the individual. Instead of the first section, which brings into question the roles of companies colluding to form a horizontally integrated market, the second section will delineate what makes a monopoly illegal in the American free market system.

There happen to be many examples of attempts to monopolize the market within a particular sector of the economy.  The first major case brought before the courts dealt with John Rockefeller’s Standard Oil Company. Written in 1890 by Senator John Sherman, the Act was intended to address the declining amount of competition within US industry. Rockefeller’s attempt to monopolize the oil market would prove that Sherman’s assessment was spot on.

By mid-1900 Standard Oil had complete control of the refining process and delivery process within the oil industry. He also outwitted many of his competitors turning waste into profit in many cases since crude oil has many different byproducts. However, his attempt to monopolize the market, more specifically his family’s since by 1918 when Standard Oil was to appear before the Supreme Court he had already stepped down as Chairman, was brought to an end.

A litany of charges was brought against Standard Oil, from corporate espionage to the use of secret railways. These acts were engaged in by the company, with the direction coming from the individuals at the top causing the case to both violate the first and second sections of the Sherman Act.

Yet another monopoly of the time was forming led by one of Rockefeller’s contemporaries, however the circumstances were quiet different. For Rockefeller, an individual, he knowingly attempted to monopolize the oil market restraining free market interstate commerce. It was his clear intent to become not only the leader in oil refining, but to be the sole provider of refined oil. Henry Ford invented the assembly line for automobiles, a technological first of the time and a historical moment.

Equally Ford never made an effort to monopolize the automobile market. He had just created a better system and would benefit over the coming years, dominating the market share. Nor did he use his monopolistic power to crush competitors. Once his patent ran out on the assembly line, it was free for anyone to copy. His example shows the difference of intent in attempts to monopolize the market. Intent, for the courts, would become one of the main reasons to break up a monopoly.

Not all monopolies are guilty of breaking the Sherman Act. Henry Ford’s company certainly did not infringe against antitrust laws. His monopoly was formed by a historic technological breakthrough. On the other hand, due to the intent of the Rockefellers to dominate the oil market, implicitly and explicitly forming a monopoly, Standard Oil was found to be break the antitrust laws found within the Sherman Act.