Monopoly: The Vulnerability Formed By Dominating Businesses

If there was only a single student in a class, no matter how he performed, he would be considered as the topper, in the same way if there is no competition, the individual will definitely thrive, but is it a good thing? What if the scale was larger? If there is no competition for an individual to be better, they have no incentive to try harder, a student will not work hard if they know they will top the class. If we were to take a good look at the big picture, this is truly dangerous, now if we were to apply this same principle to a business, it is devastating.

Monopoly Is like the Game, But Everyone Loses More

The term monopoly might remind you of the game Monopoly, where one player who gets everyone’s money is the winner, economic monopoly is also similar, one business which sells a unique product will dominate the market and thus face no competition. On the bright side, the business will be lauded for its uniqueness for having an innovative product or service which no one can compete with, and on the other hand, they will have too much power, a common misuse of this power is preventing new players from entering the market, price your products so low that the competition can’t compete, or buyout rival businesses and cut off the capital, these are tactics which were seen in a lot of monopolies, Standard Oil Company Inc. is a good example of this, they had dominance over the American oil industry and undercut prices so low that the rival oil businesses couldn’t compete, and later after a ruling pronounced a verdict that they were an illegal monopoly, the company was split up into multiple companies thus balancing out the oil sector ecosystem.

One major problem for monopolies is that they aren’t threatened by competition, so they have no constraint on pricing their products, so the consumers will no choice be shelling out a lot of money to fuel excess profits which they probably will not use to better their product and bring the cost down. In any business ecosystem where a monopoly exists, it’s always the consumers, who get the short end of the stick.

Supremacy Of Digital Monopolies

There is a saying “Data is the oil of the 21^st Century”, We live in a world of digital dominance, so digital monopolies are more dangerous, software multinational companies have data over every individual that uses their platform and also collect data over all our activities on the internet with/without consent, we have online firms that have billions of users, Microsoft was a monopoly in the PC market in the early 90’s and was found to be exhibiting monopoly, so to comply the ruling they decided to invest in apple, if a monopoly is too big it can even threaten the economy of a country and endanger the data of all its citizens, information rich companies like Google and Facebook API is used by a lot of online marketplaces and businesses, in the past when Google went down for a couple of hours, it was jeopardizing to a lot of businesses as they couldn’t login with their Google credentials, the entire business world came to a standstill, this incident was an excellent case study to show what happens when a handful of companies dominate the internet ecosystem.

The Necessity Of A Competitive Market

A competitive market must exist in order for businesses to be on their toes, competition drives innovation, the power of competition creates decent pricing, and most of all consumers will have the ability to choose, the same sector can have different products/services which can serve different niches, A free market is what drives a capitalist economy, a fair market is a balanced market, monopolies upset the balance of a sector, or if large enough, the local economy, it is through the principle of a free market economy we have achieved our current quality standard of living. Allowing competition is tantamount to catering for consumers of various economic classes and regions, but in a monopoly, as per their pricing standards, there is a high chance that they can cater only to a few groups.

“Too Much Of A Good Thing Is A Bad Thing”

It is a good deal on the surface if you are the only provider of a service in the region. Everyone is your customer whether they like it or not. Still, if the abuse of power is as bright as day, you will be inviting the authorities to reign you in, there is a saying known as “too much of a good thing is a bad thing”, and this saying is apt here, a good economy is a free market, balanced economy, it’s not just the businesses that must be responsible, consumers too must be responsible.