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A legal monopoly, statutory monopoly, or ''de jure'' monopoly is a
monopoly
A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...
that is protected by law from competition. A statutory monopoly may take the form of a
government monopoly
In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopo ...
where the state owns the particular
means of production
The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...
or
government-granted monopoly
economics, a government-granted monopoly (also called a "de jure monopoly" or "regulated monopoly") is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good ...
where a private interest is protected from competition such as being granted exclusive rights to offer a particular service in a specific region (e.g.
patented
A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...
inventions) while agreeing to have their policies and prices regulated.
investorwords.com
definition This type of monopoly is usually contrasted with '' ''de facto'' monopoly'' which is a broad category for monopolies that are not created by government.
History
Jurisdictions have at various times imposed legal monopolies on various commodities, including salt, iron and tobacco
Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
. The English Statute of Monopolies of 1623 was an early step in an English movement to convert letters patent from a method of rewarding royal favourite
Royal may refer to:
People
* Royal (name), a list of people with either the surname or given name
* A member of a royal family
Places United States
* Royal, Arkansas, an unincorporated community
* Royal, Illinois, a village
* Royal, Iowa, a c ...
s at other than royal expense, to a method of encouraging inventors.
The British East India Company
The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and South ...
(1600), Dutch East India Company
The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock ...
(1602), and similar national trading companies were granted exclusive trade rights by their respective national governments (monarchs). Private interlopers were subject to criminal penalties, and the companies fought wars in the 17th century to delineate and defend their monopoly territories.
Legal monopolies on alcohol remain commonplace, both as a source of public revenue and as a means of control, and the monopolies on opium and cocaine
Cocaine (from , from , ultimately from Quechua: ''kúka'') is a central nervous system (CNS) stimulant mainly used recreationally for its euphoric effects. It is primarily obtained from the leaves of two Coca species native to South Ameri ...
, formerly important for revenue, were converted or reinstituted during the twentieth century to curb the abuse of controlled substances
A controlled substance is generally a drug or chemical whose manufacture, possession and use is regulated by a government, such as illicitly used drugs or prescription medications that are designated by law. Some treaties, notably the Single ...
. For example, Mallinckrodt Incorporated is the only legal supplier of cocaine in the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
.
The regulation of gambling
Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...
in many places includes an official monopoly national lottery or state lottery. Where private operation is allowed, for example in horse racing, off-track betting
Off-track betting (or OTB; in British English, off-course betting) is sanctioned gambling on horse racing outside a race track.
U.S. history
Before the 1970s, only the state of Nevada allowed off-track betting. Off-track betting in New York wa ...
and casino
A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live entertai ...
s, the authorities may license only one operator.
The early 19th century ''Gibbons v. Ogden
''Gibbons v. Ogden'', 22 U.S. (9 Wheat.) 1 (1824), was a landmark decision in which the Supreme Court of the United States held that the power to regulate interstate commerce, which was granted to Congress by the Commerce Clause of the United Sta ...
'' case weakened the steamboat monopoly that New York had granted, producing an exception for interstate commerce. However the later Slaughter-House Cases
The ''Slaughter-House Cases'', 83 U.S. (16 Wall.) 36 (1873), was a landmark U.S. Supreme Court decision consolidating several cases that held that the Privileges or Immunities Clause of the Fourteenth Amendment to the U.S. Constitution only pr ...
established that a local law creating a legal monopoly did not violate the rights of other merchants in the United States.
The National Recovery Act
The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It also e ...
to promote and legally enforce producer cartels was defeated in ''Schechter Poultry Corp. v. United States
''A.L.A. Schechter Poultry Corp. v. United States'', 295 U.S. 495 (1935), was a decision by the Supreme Court of the United States that invalidated regulations of the poultry industry according to the nondelegation doctrine and as an invalid use ...
''.
In the middle twentieth century many countries established a monopoly broadcasting
Broadcasting is the distribution of audio or video content to a dispersed audience via any electronic mass communications medium, but typically one using the electromagnetic spectrum ( radio waves), in a one-to-many model. Broadcasting beg ...
agency, such as BBC #REDIRECT BBC #REDIRECT BBC
Here i going to introduce about the best teacher of my life b BALAJI sir. He is the precious gift that I got befor 2yrs . How has helped and thought all the concept and made my success in the 10th board exam. ...
...
,
Radiodiffusion-Télévision Française
Radiodiffusion-Télévision Française (RTF; ''French Radio and Television Broadcasting'') was the French national public broadcaster television organization established on 9 February 1949 to replace the post-war "''Radiodiffusion Française''" ...
, or
RAI
RAI – Radiotelevisione italiana (; commercially styled as Rai since 2000; known until 1954 as Radio Audizioni Italiane) is the national public broadcasting company of Italy, owned by the Ministry of Economy and Finance. RAI operates many ter ...
. Most large countries relaxed their law or privatized their state broadcaster late in the century.
In parts of the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
,
AT&T
AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile te ...
had a legal monopoly on the provision of
local telephone service
Local telephone service is the provision of telecommunications networks and services within a limited geographic region.
Traditionally, local telephone service was provided by small companies based in given cities and towns as opposed to larger, ...
and in
long distance until 1984 when local service was
vertically divested. The divested
local companies continued to be protected in lesser degree from competition in the local exchange market as a
public utility
A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and r ...
.
National
Postal, telegraph and telephone service A postal, telegraph, and telephone service (or PTT) is a government agency responsible for postal mail, telegraph, and telephone services. Such monopolies existed in many countries, though not in North America or Japan. Many PTTs have been partial ...
monopolies were enforced in many countries until the late 20th century.
Telstra
Telstra Group Limited is an Australian telecommunications company that builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. It is a member of the S&P/ASX 20 ...
, for example, had a legal monopoly on
telecommunications in Australia
Telecommunications in Australia refers to communication in Australia through electronic means, using devices such as telephone, television, radio or computer, and services such as the telephony and broadband networks. Telecommunications have ...
.
As do the Post Office departments in many countries, the
United States Postal Service
The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or Postal Service, is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the U ...
has a legal monopoly on delivery of non-overnight letters.
In many cities bus service enjoys a legal monopoly, however some city governments have legalized
bus competition due to pressure from consumers who desire lower prices and entrepreneurs that would like to provide them.
Professional sports organizations such as
Major League Baseball
Major League Baseball (MLB) is a professional baseball organization and the oldest major professional sports league in the world. MLB is composed of 30 total teams, divided equally between the National League (NL) and the American League (AL), ...
are not legally protected from
independent league baseball
Independent or Independents may refer to:
Arts, entertainment, and media Artist groups
* Independents (artist group), a group of modernist painters based in the New Hope, Pennsylvania, area of the United States during the early 1930s
* Independ ...
, but nonetheless are sometimes called legal monopolies on grounds that they are exempted from
US antitrust law
In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherma ...
.
Professional
licensure
Licensure means a restricted practice or a restriction on the use of an occupational title, requiring a license. A license created under a "practice act" requires a license before performing a certain activity, such as driving a car on public roa ...
as of
Professional Engineer
Regulation and licensure in engineering is established by various jurisdictions of the world to encourage life, public welfare, safety, well-being, then environment and other interests of the general public and to define the licensure process thro ...
s in the United States or
Chartered Accountants in the United Kingdom, does not limit the number of practitioners to one, but detractors sometimes call the system a legal monopoly anyway.
The creation of
Sirius XM Radio
Sirius XM Holdings Inc. is an American broadcasting company headquartered in Midtown Manhattan, New York City that provides satellite radio and online radio services operating in the United States. It was formed by the 2008 merger of Sirius Sat ...
by merger left the United States with only one licensed satellite radio broadcasting company. However, the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
decided that this was not harmful to competition, due to the presence of terrestrial broadcasters.
See also
*
Government-granted monopoly
economics, a government-granted monopoly (also called a "de jure monopoly" or "regulated monopoly") is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good ...
References
{{DEFAULTSORT:Legal Monopoly
Monopoly (economics)