A monopoly is a market with one dominant seller and no close substitutes, so that seller can set prices and terms. Classic examples are Standard Oil, whose trust the US government pursued under the Sherman Act of 1890, and natural monopolies such as local water and power networks. Today’s sharpest cases are digital: in August 2024 a US federal court found that Google is a monopolist in general search, and the EU names six gatekeepers under its Digital Markets Act. Holding a monopoly is not itself illegal; gaining or keeping it by exclusionary conduct is.
When one network serves a market more cheaply than two could, as with water pipes or power grids, one supplier is usual and prices are regulated.
02
Legal monopoly
Patents, copyrights and licences grant temporary exclusive rights, for example on a new drug, to reward invention.
03
Resource or cartel control
Controlling a scarce input or coordinating a whole industry, as the Standard Oil trust did in oil refining, removes competition.
04
Platform monopoly
Network effects and defaults, such as search on phones or an app store, can make one platform the gateway between users and businesses.
Where you see it today
Google in search
A US court found in August 2024 that Google is a monopolist and acted as one to maintain its monopoly. The September 2025 remedies bar exclusive distribution deals for Search, Chrome, Assistant and the Gemini app, and require some data sharing with rivals.
Google in ad tech
In a separate case, the Justice Department won remedies on 16 September 2026 that open Google’s ad exchange and publisher ad server to rival tools, with a monitor overseeing compliance for six years.
Gatekeepers in Europe
The European Commission designated Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft as gatekeepers on 6 September 2023, covering 22 core platform services. In April 2025 it fined Apple โฌ500 million and Meta โฌ200 million for breaching the rules.
AI defaults as the next front
The US search remedies explicitly reach generative AI products, because the same default deals that protected search could protect an AI assistant. Distribution, not only model quality, is now an antitrust question.
Monopoly examples and what happened
Standard Oil
TypeCartel / trust
What happenedPursued under the Sherman Act; the government used the act against it by 1911
Local water and power networks
TypeNatural monopoly
What happenedOne supplier per area, prices set by regulators
Patented medicines
TypeLegal monopoly
What happenedExclusivity ends when the patent expires and generics enter
Google search
TypePlatform monopoly
What happenedFound a monopolist in August 2024; remedies ordered September 2025
Apple App Store (EU)
TypePlatform gatekeeper
What happenedFined โฌ500 million under the Digital Markets Act, April 2025
What it means for you
Separate dominance from abuse: a large share earned by a better product is legal; exclusive deals that block rivals may not be.
If you depend on a gatekeeper, map what rules now constrain it (DMA in Europe, court remedies in the US) and where they open doors.
Watch distribution defaults: the deals that put a product in front of users can matter more than the product.
When you build a moat, prefer ones customers value, such as data network effects or switching value, over ones regulators can unwind.
Track AI assistants for the same pattern: who pays to be the default, and who is shut out.
The Business Engineer lens
Monopolies in the AI era form at the distribution layer: whoever owns the default assistant, device or cloud can tax everything built on top. The Business Engineer reads the Google remedies and the DMA as the first rules for that layer, and as a guide to where openings for challengers will appear.
Google in general search: a US federal court ruled in August 2024 that Google is a monopolist and acted to maintain its monopoly.
Is it illegal to be a monopoly?
No. In the US, the Sherman Act targets monopolising, meaning gaining or keeping a monopoly through exclusionary conduct, not simply being the largest firm.
What is a natural monopoly?
A market, such as water or power networks, where one supplier can serve demand more cheaply than several, so prices are usually regulated.
What are gatekeepers under the EU Digital Markets Act?
Large platforms designated by the European Commission as gateways between businesses and consumers; the first six were Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft.
A local utility company, such as a single electricity provider or water supply company, that has exclusive rights to serve a specific geographic area.
Monopoly utilities often lead to regulated pricing, as they provide essential services, but may lack competitive incentives for innovation and cost control.
Internet Search
Online search engines.
Google, as the dominant search engine, controls the majority of the global search market share, making it a de facto monopoly.
Google’s search dominance raises concerns about data privacy, antitrust issues, and potential bias in search results.
Operating Systems
Computer operating systems.
Microsoft’s Windows OS has historically held a monopoly in the personal computer market, with a vast majority of PCs using its operating system.
Microsoft faced antitrust lawsuits in the past for using its dominance to stifle competition, leading to regulatory action.
Pharmaceutical Patents
Medicines with exclusive patents.
Pharmaceutical companies that hold exclusive patents for essential medications, preventing generic alternatives.
Monopolistic pricing of patented drugs can result in high healthcare costs and limited access to essential treatments for patients.
Diamond Mining
Extraction and sale of diamonds.
De Beers historically controlled the majority of the world’s diamond production, leading to a diamond mining monopoly.
De Beers’ control led to price manipulation and concerns about ethical practices in the diamond industry.
Postal Services
Mail and package delivery services.
National postal services in many countries, such as the USPS in the United States, hold monopolies on mail delivery within their respective jurisdictions.
Monopoly postal services often face financial challenges and may require government subsidies to maintain universal service.
Satellite Television
Broadcast of satellite TV signals.
In some regions, satellite TV providers like DirecTV or Dish Network may have a monopoly or near-monopoly on satellite television services.
Satellite TV monopolies can limit consumer choices and pricing competition in the television entertainment market.
Major League Sports
Professional sports leagues.
Major sports leagues like the NFL, NBA, and MLB in the United States often operate as monopolies, with exclusive control over their respective sports.
Monopolistic control allows leagues to negotiate lucrative TV deals but can also lead to labor disputes and antitrust scrutiny.
Public Transportation
Local public transportation services.
In some cities, a single public transportation agency or company may have a monopoly on bus, subway, or tram services.
Monopoly public transportation providers can lead to service inefficiencies and may require government oversight to ensure affordability and accessibility.
Tobacco Industry
Production and sale of tobacco products.
Companies like Philip Morris International and British American Tobacco dominate the global tobacco industry, often operating as near-monopolies.
The tobacco industry faces extensive regulation due to concerns about public health and smoking-related illnesses.
Social Media
Online social networking platforms.
Facebook, as the parent company of platforms like Instagram and WhatsApp, has a significant monopoly in the social media industry.
Facebook’s dominance raises concerns about data privacy, market power, and potential antitrust actions.
Local Cable TV
Cable television services in specific regions.
In some areas, a single cable TV provider may have a monopoly on cable television services, limiting consumer choices.
Cable TV monopolies may result in higher prices and limited competition in local TV markets.
Railway Systems
Rail transportation services.
In some regions, a single railway company may have a monopoly on rail transportation, controlling both freight and passenger services.
Railway monopolies can lead to pricing concerns, limited access for competitors, and government regulation to ensure fair access and pricing.
Currency Printing
Production of a nation’s currency.
National mints and central banks often have a monopoly on currency production, ensuring the integrity of a country’s currency.
Currency printing monopolies are necessary to prevent counterfeiting but require strict security measures and government oversight.
Healthcare Services
Healthcare providers in specific regions.
In certain areas, a single healthcare provider or hospital system may have a near-monopoly on healthcare services, limiting patient choice.
Healthcare monopolies may lead to higher healthcare costs and concerns about healthcare quality and accessibility.
Academic Publishing
Publishing of academic journals and research.
A few major academic publishers, such as Elsevier, Taylor & Francis, and Springer, dominate the academic publishing industry.
Academic publishing monopolies have led to high subscription costs for universities and libraries, limiting access to research.
Space Launch Services
Commercial satellite launch services.
Companies like SpaceX have gained a dominant position in the commercial space launch industry, potentially leading to a near-monopoly.
Dominance in space launch services can impact pricing, access to space, and competition in the emerging space economy.
Music Streaming Services
Online music streaming platforms.
Spotify is a prominent example, with a significant market share in music streaming, potentially approaching a monopoly in some regions.
Dominance in music streaming can affect artist compensation, platform exclusivity, and competition in the music industry.
A monopoly is a market structure characterized by the presence of a single, dominant individual or enterprise that is the sole supplier of a product or service. Monopolies are associated with a lack of competition and an absence of viable product substitutes. As a consequence, the company can sell products and services at prices that result in substantial profits.
These market conditions can arise by themselves or be instituted by the government to build infrastructure โ as explored in the economics of AI compute infrastructure โ or encourage economic growth. Vertical integration can also encourage a monopoly to form. In short, this occurs when the supply chain of a company is integrated with and owned by that company.
Not all monopolies are illegal, with many businesses cornering the market simply because they offer a superior product. A firm will only attract the attention of regulators if it attained monopoly status via predatory or exclusionary conduct.
With that said, letโs take look at some of the many historic and modern monopoly examples.
Apple
Apple is one of the most valuable companies in the world thanks to its ability to build a business ecosystem on top of the iPhone.
The company today controls most of the mobile Internet pipelines, and it collects a 30% tax on top of it.
Apple is the perfect example of modern tech monopoly, which is hidden to the view.
In fact, if you compare Android to Apple’s operating system, you get a majority stake in the hand of Android.
However, Android (owned by Google) is a fragmented ecosystem (and by the way, Google is the other mobile monopolist) made of many devices.
Apple instead consolidates all of its stakes into the iPhone, which contributed to most of Apple’s revenues and profits.
And by combining hardware, software, and marketplace, that is how Apple built one of the most powerful tech monopolies of our times.
Apple has a business model that is broken down between products and services. Apple generated over $365 billion in revenues in 2021, of which $191.9 came from the iPhone sales, $35.2 came from Mac sales, $38.3 came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $31.86 billion came from iPad sales, and $68.4 billion came from services.
Standard Oil
Standard Oil was an American producer, transporter, and refiner of oil founded by John D. Rockefeller in 1870.
Rockefeller used a variety of tactics to purchase as many competitor refineries as he could and entered into secret deals with railroad companies to reduce shipping costs. These efforts resulted in Standard Oil controlling 90% of the oil refining market in the United States after little more than a decade in operation.
Standard Oilโs rise to prominence made it the first great industrial company in the world to become a monopoly. However, it was ultimately sued by the U.S. Justice Department in 1909 under antitrust laws and was ordered to break up into 34 independent entities two years later.
De Beers Group
De Beers Group is a corporation that specializes in the mining and trading of diamonds. It is also a manufacturer of diamonds for industrial purposes. It was founded by British politician and mining magnate Cecil Rhodes in 1888.
The company had a monopoly in the diamond trade for almost 100 years before excess supply from Australian, Canadian, and Russian mines increased competition. From a peak of around 85%, De Beers is now the second-largest distributor at a more meager 30%.
Luxottica
Luxottica, formally Luxottica Group PIVA, is a vertically-integrated Italian eyewear manufacturer and designer that was founded by Leonard Del Vecchio in 1961.
Brands under the Luxottica banner include Ray-Ban, Armani Exchange, Chanel, Versace, Prada, and Ralph Lauren. The company also owns multiple insurance companies and related optical departments at department stores such as Target and Sears. It has been criticized for monopolistic practices with price markups approaching 1000%.
In business, vertical integration means a whole supply chain of the company is controlled and owned by the organization. Thus, making it possible to control each step through customers. in the digital world, vertical integration happens when a company can control the primary access points to acquire data from consumers.
YKK
The YKK Group is a Japanese conglomerate founded by Tadao Yoshida in 1934.
The group is the worldโs largest manufacturer of zippers, which are used in products such as dresses, jeans, jackets, camping equipment, and boating equipment.
After the Second World War, the conglomerate purchased an automated zipper manufacturing machine from the United States. Over time, it continued to innovate and took steps to control every aspect of the manufacturing process itself. In a 1998 Los Angeles Times article, it was explained that The YKK Group โsmelts its own brass, concocts its own polyester, weaves and color-dyes cloth for its zipper tapesโฆโ and so forth.
Saudi Aramco is a petroleum and natural gas company founded in 1933 and is the operator of the worldโs most extensive hydrocarbon network. The company also owns the largest onshore and offshore oil fields in addition to a colossal natural gas reserve.
Saudi Aramco has a monopoly on oil production in Saudi Arabia and the company is also a significant exporter of the commodity. Having said that, the companyโs dominant presence in the oil industry has been eroded to some extent by the COVID-19 pandemic and the shift toward renewable energy sources.
Key takeaways
A monopoly is a market structure characterized by the presence of a single, dominant individual or enterprise that is the sole supplier of a product or service.
Standard Oil was the worldโs first great industrial monopoly, at one point controlling 90% of the oil market in the United States. De Beers Group had a similar stranglehold on diamonds for almost a century before excess supply reduced its market share.
Luxottica is an Italian vertically-integrated eyewear brand that controls more than a quarter of global eyewear sales. The YKK Group and Saudi Aramco have monopolies in fossil fuel production and zipper sales respectively.
How AI Is Changing This
AI is revolutionizing how we understand and identify monopoly behavior in the digital economy, with tech platforms serving as prime examples. Consider how AI algorithms now help regulators analyze Amazon’s marketplace practices in real-time. The Federal Trade Commission uses machine learning tools to process millions of transactions and seller interactions, detecting patterns that might indicate anti-competitive behavior, such as preferential treatment of Amazon’s own products in search results or predatory pricing strategies against third-party sellers. These AI systems can identify subtle market manipulation that would take human analysts months to uncover, such as algorithmic price-fixing or coordinated suppression of competitor listings. This technological shift means regulators can now monitor monopolistic practices as they happen rather than investigating them years after the damage is done, fundamentally changing how antitrust enforcement works in the digital age.
Key Highlights:
Monopoly Definition: A monopoly refers to a market structure where a single dominant individual or enterprise holds exclusive control over the supply of a product or service. This lack of competition enables the company to set prices and generate substantial profits.
Formation of Monopolies:
Monopolies can arise naturally or be established by the government for economic growth or infrastructure development.
Vertical integration, where a company owns and controls its entire supply chain, can contribute to monopoly formation.
Not all monopolies are illegal; some may emerge due to superior product offerings.
Examples of Historic and Modern Monopolies:
Apple: Apple’s ecosystem, primarily driven by the iPhone, has allowed it to create a tech monopoly through control of mobile Internet pipelines and a comprehensive product-service integration.
Standard Oil: Founded by John D. Rockefeller, Standard Oil achieved a monopoly in the oil industry by acquiring competitors and securing deals with railroads. It was eventually broken up due to antitrust laws.
De Beers Group: This corporation, founded by Cecil Rhodes, held a diamond trade monopoly for nearly a century. Competition from other mines reduced its dominance to around 30%.
Luxottica: An Italian eyewear conglomerate, Luxottica controls over 25% of global eyewear sales through brands like Ray-Ban and Armani Exchange.
YKK: YKK Group, a Japanese conglomerate, produces around 50% of all zippers globally, maintaining its monopoly through vertical integration and control over the entire manufacturing process.
Saudi Aramco: This petroleum and gas company holds a monopoly on oil production in Saudi Arabia and owns extensive oil and gas reserves. It has faced challenges due to the shift towards renewable energy sources.
The idea of a market economy first came from classical economists, including David Ricardo, Jean-Baptiste Say, and Adam Smith. All three of these economists were advocates for a free market. They argued that the โinvisible handโ of market incentives and profit motives were more efficient in guiding economic decisions to prosperity than strict government planning.
Positive economics is concerned with describing and explaining economic phenomena; it is based on facts and empirical evidence. Normative economics, on the other hand, is concerned with making judgments about what “should be” done. It contains value judgments and recommendations about how the economy should be.
When there is an increased price of goods and services over a long period, it is called inflation. In these times, currency shows less potential to buy products and services. Thus, general prices of goods and services increase. Consequently, decreases in the purchasing power of currency is called inflation.
Asymmetric information as a concept has probably existed for thousands of years, but it became mainstream in 2001 after Michael Spence, George Akerlof, and Joseph Stiglitz won the Nobel Prize in Economics for their work on information asymmetry in capital markets. Asymmetric information, otherwise known as information asymmetry, occurs when one party in a business transaction has access to more information than the other party.
Autarky comes from the Greek words autos (self)and arkein (to suffice) and in essence, describes a general state of self-sufficiency. However, the term is most commonly used to describe the economic system of a nation that can operate without support from the economic systems of other nations. Autarky, therefore, is an economic system characterized by self-sufficiency and limited trade with international partners.
Creative destruction was first described by Austrian economist Joseph Schumpeter in 1942, who suggested that capital was never stationary and constantly evolving. To describe this process, Schumpeter defined creative destruction as the โprocess of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.โ Therefore, creative destruction is the replacing of long-standing practices or procedures with more innovative, disruptive practices in capitalist markets.
Happiness economics seeks to relate economic decisions to wider measures of individual welfare than traditional measures which focus on income and wealth. Happiness economics, therefore, is the formal study of the relationship between individual satisfaction, employment, and wealth.
An oligopsony is a market form characterized by the presence of only a small number of buyers. These buyers have market power and can lower the price of a good or service because of a lack of competition. In other words, the seller loses its bargaining power because it is unable to find a buyer outside of the oligopsony that is willing to pay a better price.
The term โanimal spiritsโ is derived from the Latin spiritus animalis, loosely translated as โthe breath that awakens the human mindโ. As far back as 300 B.C., animal spirits were used to explain psychological phenomena such as hysterias and manias. Animal spirits also appeared in literature where they exemplified qualities such as exuberance, gaiety, and courage. Thus, the term โanimal spiritsโ is used to describe how people arrive at financial decisions during periods of economic stress or uncertainty.
State capitalism is an economic system where business and commercial activity is controlled by the state through state-owned enterprises. In a state capitalist environment, the government is the principal actor. It takes an active role in the formation, regulation, and subsidization of businesses to divert capital to state-appointed bureaucrats. In effect, the government uses capital to further its political ambitions or strengthen its leverage on the international stage.
The boom and bust cycle describes the alternating periods of economic growth and decline common in many capitalist economies. The boom and bust cycle is a phrase used to describe the fluctuations in an economy in which there is persistent expansion and contraction. Expansion is associated with prosperity, while the contraction is associated with either a recession or a depression.
The paradox of thrift was popularised by British economist John Maynard Keynes and is a central component of Keynesian economics. Proponents of Keynesian economics believe the proper response to a recession is more spending, more risk-taking, and less saving. They also believe that spending, otherwise known as consumption, drives economic growth. The paradox of thrift, therefore, is an economic theory arguing that personal savings are a net drag on the economy during a recession.
In simplistic terms, the circular flow model describes the mutually beneficial exchange of money between the two most vital parts of an economy: households, firms and how money moves between them. The circular flow model describes money as it moves through various aspects of society in a cyclical process.
Trade deficits occur when a countryโs imports outweigh its exports over a specific period. Experts also refer to this as a negative balance of trade. Most of the time, trade balances are calculated based on a variety of different categories.
A market type is a way a given group of consumers and producers interact, based on the context determined by the readiness of consumers to understand the product, the complexity of the product; how big is the existing market and how much it can potentially expand in the future.
Rational choice theory states that an individual uses rational calculations to make rational choices that are most in line with their personal preferences. Rational choice theory refers to a set of guidelines that explain economic and social behavior. The theory has two underlying assumptions, which are completeness (individuals have access to a set of alternatives among they can equally choose) and transitivity.
The peer-to-peer (P2P) economy is one where buyers and sellers interact directly without the need for an intermediary third party or other business. The peer-to-peer economy is a business model where two individuals buy and sell products and services directly. In a peer-to-peer company, the seller has the ability to create the product or offer the service themselves.
The term โknowledge economyโ was first coined in the 1960s by Peter Drucker. The management consultant used the term to describe a shift from traditional economies, where there was a reliance on unskilled labor and primary production, to economies reliant on service industries and jobs requiring more thinking and data analysis. The knowledge economy is a system of consumption and production based on knowledge-intensive activities that contribute to scientific and technical innovation.
In a command economy, the government controls the economy through various commands, laws, and national goals which are used to coordinate complex social and economic systems. In other words, a social or political hierarchy determines what is produced, how it is produced, and how it is distributed. Therefore, the command economy is one in which the government controls all major aspects of the economy and economic production.
How do you protect your rights as a worker? Who is there to help defend you against unfair and unjust work conditions? Both of these questions have an answer, and itโs a solution that many are familiar with. The answer is a labor union. From construction to teaching, there are labor unions out there for just about any field of work.
The bottom of the pyramid is a term describing the largest and poorest global socio-economic group. Franklin D. Roosevelt first used the bottom of the pyramid (BOP) in a 1932 public address during the Great Depression. Roosevelt noted that – when talking about the ‘forgotten man:’ “these unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power.. that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.”
Glocalization is a portmanteau of the words โglobalizationโ and โlocalization.โ It is a concept that describes a globally developed and distributed product or service that is also adjusted to be suitable for sale in the local market. With the rise of the digital economy, brands now can go global by building a local footprint.
Market fragmentation is most commonly seen in growing markets, which fragment and break away from the parent market to become self-sustaining markets with different products and services. Market fragmentation is a concept suggesting that all markets are diverse and fragment into distinct customer groups over time.
The L-shaped recovery refers to an economy that declines steeply and then flatlines with weak or no growth. On a graph plotting GDP against time, this precipitous fall combined with a long period of stagnation looks like the letter โLโ. The L-shaped recovery is sometimes called an L-shaped recession because the economy does not return to trend line growth. The L-shaped recovery, therefore, is a recession shape used by economists to describe different types of recessions and their subsequent recoveries. In an L-shaped recovery, the economy is characterized by a severe recession with high unemployment and near-zero economic growth.
Comparative advantage was first described by political economist David Ricardo in his book Principles of Political Economy and Taxation. Ricardo used his theory to argue against Great Britainโs protectionist laws which restricted the import of wheat from 1815 to 1846. Comparative advantage occurs when a country can produce a good or service for a lower opportunity cost than another country.
The Easterlin paradox was first described by then professor of economics at the University of Pennsylvania Richard Easterlin. In the 1970s, Easterlin found that despite the American economy experiencing growth over the previous few decades, the average level of happiness seen in American citizens remained the same. He called this the Easterlin paradox, where income and happiness correlate with each other until a certain point is reached after at least ten years or so. After this point, income and happiness levels are not significantly related. The Easterlin paradox states that happiness is positively correlated with income, but only to a certain extent.
In Economics, Economies of Scale is a theory for which, as companies grow, they gain cost advantages. More precisely, companies manage to benefit from these cost advantages as they grow, due to increased efficiency in production. Thus, as companies scale and increase production, a subsequent decrease in the costs associated with it will help the organizationscale further.
In Economics, a Diseconomy of Scale happens when a company has grown so large that its costs per unit will start to increase. Thus, losing the benefits of scale. That can happen due to several factors arising as a company scales. From coordination issues to management inefficiencies and lack of proper communication flows.
An economy of scope means that the production of one good reduces the cost of producing some other related good. This means the unit cost to produce a product will decline as the variety of manufactured products increases. Importantly, the manufactured products must be related in some way.
Price sensitivity can be explained using the price elasticity of demand, a concept in economics that measures the variation in product demand as the price of the product itself varies. In consumer behavior, price sensitivity describes and measures fluctuations in product demand as the price of that product changes.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur, HackerNoon and Search Engine People. Find him on LinkedIn and Substack. See how we source.
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