monopolizing

Monopolizing refers to actions taken by a firm or group of firms to gain and maintain a monopoly or dominant position in a market. It encompasses strategies that reduce competitive pressure, block market entry, or exclude rivals rather than compete on price and quality alone.

Common methods include acquiring competitors or potential rivals, exclusive dealing arrangements, tying and bundling products, loyalty or volume rebates that foreclose rivals, predatory pricing intended to drive rivals from the market, and control of essential facilities or infrastructure. Firms may also use mergers, strategic alliances, or aggressive intellectual property tactics to deter competition. In some cases, natural or regulatory conditions create high barriers to entry that facilitate monopolization.

Economic effects of monopolizing can include higher prices, reduced output, and less consumer choice, though proponents of certain dominant firms argue potential efficiency gains. The overall welfare impact depends on whether the monopoly yields dynamic or allocative efficiencies and whether competition policy effectively constrains abuse.

Legal frameworks generally prohibit monopolizing or abuses of dominance. In the United States, Section 2 of the Sherman Act prohibits monopolization, attempts to monopolize, or conspiracies to monopolize, with enforcement focused on market power, conduct, and intent. In the European Union, Article 102 TFEU bars abusive conduct by dominant firms. Remedies may include fines, behavioral or structural remedies, or divestitures. It is important to distinguish monopolization from legitimate market power arising from superior products, efficiency, or regulation.