What is the difference between monopoly and monopolization

And if you have a nice big share of that market , you should assume that the courts would be prepared to ask some tough questions about how you got that share, and how you are using your monopoly power. If you should write a memo stating that your company " dominates " a " market ", a judge and jury may well believe that the company does dominate the market.

It is not automatically illegal to dominate a market. It is illegal to dominate a market if you secured your position or if you keep your position by business tactics that are predatory or exclusionary. In general, whenever it appears that the purpose of business conduct is to eliminate a competitor or to hurt its ability to compete, instead of to promote the sales and to maximize the profits of the company that engages in that conduct, a court very well may regard that business strategy as exclusionary or predatory.

It is legal for a dominant firm to continue to compete hard, as long as it competes fairly. But how do you distinguish in practice competition which is hard but fair from competitive methods that are unfairly exclusionary?

In many situations there is no magic formula which will lead you to guaranteed answers to this question. We have seen the words that the Supreme Court uses to describe monopolization. But, realistically, those words will mean different things to different people, and different judges will bring varied points of view to bear on the question.

Some judges have a pro-business point of view, and are inclined to be very generous in accepting the explanations offered by a dominant firm for its success. Others will have far more sympathy for the small firm and far more suspicion of the motives of big business.

Nevertheless, the law of monopolization is far from being a hopeless mess. Identifier Unique identifying numbers for this report in the Digital Library or other systems.

Collections This report is part of the following collection of related materials. About Browse this Collection. Digital Files 1 file. None Metadata API: descriptive and downloadable metadata available in other formats. When Dates and time periods associated with this report. Creation Date June 28, Description Last Updated June 2, , p. Usage Statistics When was this report last used? Yesterday: 0.

Past 30 days: 5. Total Uses: More Statistics. Where Geographical information about where this report originated or about its content. Place Name United States. Publication Place Washington D. Obtaining a monopoly by superior products, innovation, or business acumen is legal; however, the same result achieved by exclusionary or predatory acts may raise antitrust concerns.

Exclusionary or predatory acts may include such things as exclusive supply or purchase agreements; tying; predatory pricing; or refusal to deal. Finally, the monopolist may have a legitimate business justification for behaving in a way that prevents other firms from succeeding in the marketplace.

For instance, the monopolist may be competing on the merits in a way that benefits consumers through greater efficiency or a unique set of products or services. In the end, courts will decide whether the monopolist's success is due to "the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.

Microsoft was found to have a monopoly over operating systems software for IBM-compatible personal computers. Microsoft was able to use its dominant position in the operating systems market to exclude other software developers and prevent computer makers from installing non-Microsoft browser software to run with Microsoft's operating system software.

Specifically, Microsoft illegally maintained its operating systems monopoly by including Internet Explorer, the Microsoft Internet browser, with every copy of its Windows operating system software sold to computer makers, and making it technically difficult not to use its browser or to use a non-Microsoft browser. Microsoft also granted free licenses or rebates to use its software, which discouraged other software developers from promoting a non-Microsoft browser or developing other software based on that browser.

These actions hampered efforts by computer makers to use or promote competing browsers, and discouraged the development of add-on software that was compatible with non-Microsoft browsers. The court found that, although Microsoft did not tie up all ways of competing, its actions did prevent rivals from using the lowest-cost means of taking market share away from Microsoft.