Some examples of legal monopolies in the United States are the USPS, which holds a legal monopoly on mail transportation, the National Football League and Major League Baseball are legal monopolies. One of the critical issues with legal monopolies is that once a company receives a mandate or license to operate in a particular market or industry, it eliminates consumer choice and alternatives. At the same time, it can reduce the willingness of companies with legal monopolies to innovate and offer better products and services to consumers. In addition, it can also exacerbate gender inequality. The production and sale of alcohol is also a common legal monopoly, as you must have a government license to do both. Similarly, despite the prohibition of dangerous drugs such as heroin, there are legal monopolies that control their production and distribution for legitimate scientific purposes; The legalization of marijuana in the United States is currently somewhere in between. Early 19th Century Gibbons v. The Ogden case weakened New York`s steamship monopoly and created an exception for interstate trade. However, subsequent cases of the slaughterhouse concluded that a local law creating a legal monopoly did not violate the rights of other traders in the United States. For several decades, the political climate has been against legal monopolies, as they have been perceived as a combination of the worst characteristics of corporations and governments. The first sign of this trend was the dissolution of Ma Bell in the 1980s, and many broadcasting monopolies such as the English BBC were reduced to mere corporations. A legal monopoly is materially different from a “de facto” monopoly, which refers to a monopoly that is not created by a government entity.
A legal monopoly occurs when a single firm or corporation has absolute control over a particular good or service in the market. Although there are legal monopolies in almost all countries, their number is decreasing. Let`s look at the factors that influence a legal monopoly. In a monopoly, there can be no narrow substitute for a good or service. The bottom line is that a tight replacement equals the competition. Competition cannot exist in a monopoly. National monopolies of posts, telegraphs and telephones were established in many countries until the end of the 20th century. J.A. Telstra, for example, had a legal monopoly on telecommunications in Australia. It is a state-sponsored monopoly where the firm restricts the entry of firms and provides and regulates all market operations through a single firm.
Some good examples include the U.S. Postal Service and drinking water supply. Due to the lack of competition, price variation is kept to a minimum. Nor does it depend on the rule of supply and demand. Public franchises have security and security that is supported by the government. A legal monopoly, a statutory monopoly or a de jure monopoly is a monopoly protected by competition law. A statutory monopoly may take the form of a State monopoly if the State owns the means of production in question, or a State-granted monopoly in which a private interest is protected from competition, such as the granting of exclusive rights to offer a particular service in a particular region (e.g. patented inventions) while agreeing to regulate its policies and prices. [1] This type of monopoly is generally compared to the de facto monopoly, which is a broad category for monopolies that are not created by the government. A legal monopoly occurs when the government orders a company to become the sole seller in a particular industry.
Thus, government regulation makes the company a monopoly, and the company obtains legal protection against competition. As mentioned above, AT&T is the best example of a legal monopoly. It was in force until 1982. The inventor of the company founded and founded the company in 1907. Since the company`s service was used by all citizens of the United States, many believed that the government would step in and take control of AT&T to prevent the company from gaining too much power. In 1913, the Department of Justice reached an agreement with AT&T and the company was allowed to operate as a monopoly for the next 7 decades. In 1970, the Federal Communications Commission authorized limited competition. Some distance selling companies filed antitrust lawsuits against AT&T in 1974. This forced AT&T to divest its operating companies through a settlement in 1982.