Monopolies.
These are companies which have grown so large that their dominating influence on the market
pushes out competition from smaller rivals.
Monopolies can often harm the prospects for new businesses and force customers to pay
higher prices.
And that’s bad for any country.
America, and many other nations, have fair competition laws that ban monopolies.
Yet, as mega corporations seem to get bigger and bigger, you have to wonder, where is the
distinction?
Are megacorporations becoming monopolies?
We’re going to explore a few of America’s largest companies.
Just to be clear, these companies are not officially considered monopolies, although
they have come under scrutiny by the government for encroaching on fair market competition.
First let’s talk about Google, a company that made nearly $70 billion dollars last
year.
It owns companies like Youtube, Android, and Waze.
But it’s had numerous run-ins with the Federal Trade Commission.
Recently, a leaked FTC report from 2013 revealed just how close the FTC was to bringing charges.
Google was accused of illegal practices like promoting its own affiliate websites in google
search results, and restricting advertisers’ abilities to use other search engines.
The report said, Google’s conduct resulted in “real harm to consumers and to innovation
in the online search and advertising markets.”
However, Google ended up settling with the FTC out of court.
Monsanto is another huge company that’s been accused of monopolistic practices.
They have patents on genetically modified seeds.
Farmers are forced to purchase seeds every year instead of replanting, to avoid patent
infringement.
Monsanto remains the leading supplier of GM seeds, along with other agricultural products
such as the weed killer RoundUp, and a number of farming tech firms.According to Food and
Water Watch, in America, 80% of corn and 93% of soybeans are grown from Monsanto GMO seeds..
Then there’s Microsoft, a company that made almost 90 billion dollars last year.
They own brands like Windows, XBox, Hotmail, and Bing.
In the ‘90s, the huge corporation barely escaped being split in two by an antitrust
lawsuit brought against them by the government.
The lawsuit alleged that Microsoft promoted their own web browser on the Windows operating
system, and shut out competitors.
In 1999, a judge DID find that Microsoft “maintained its monopoly power by anticompetitive means.”
However, this verdict was later overturned.
How do some of these gigantic companies escape antitrust regulation?
Well, many of the subsidiary brands within the parent company occupy separate markets,
as delineated by the FTC.
For instance, another corporate giant, Unilever, owns brands in different niche markets, like
“ice cream”, “premium ice cream” and “super premium ice cream”.
Also, the mega-corporations have a huge amount of financial and lobbying power.
For example, Google was the fifth largest political lobbyist in 2013.
And Monsanto has spent almost $70 million dollars since 1998 on agricultural lobbying.
Clearly, these giant companies have major influence in their respective markets.
And even if they aren’t technically violating antitrust laws yet, they are right on the
cusp of what is considered a monopoly.
In order to regulate against monopolies, the government has developed what are called anti-trust
laws.
To learn how these laws work, check out our video here.
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