The Monopoly and It's Impact on Life

How do Monopolies affect me?

         Monopolies can affect the consumer in many ways. One way is through obvious price gouging that might occur from the monopolistic company raising their price over what is considered fair. In the case of Microsoft, consumers are one of their main targets, and if they are thought to be being treated wrongly then Microsoft could be thought to be monopolistic. Since one of the main parts of a monopoly is that it has no direct competition, there is not competition for price, and as accused of by Microsoft, companies begin to charge for their products whatever consumers will pay, instead of what it is worth. Microsoft for example has simply been updating its code, and probably does not cost them nearly as much to produce as what it costs. Microsoft in a way is competing against themselves, in order to stay profitable they have to convince users to upgrade from their previous products, and believe that the newer products are better. The quality of these products is almost as important as the price. If a product is produced from a company that is a monopoly, they might not put as much effort into their product because they are the only ones producing it. But in another industry a company that is a monopoly might put a lot of work into their products because they know that that is what keeps them a monopoly, and if their products were not so good it might be easier for another player to come into the game and take them over. Whether the quality of these products is better with a large or small company depends on how it should be looked at as a monopoly, and if the consumers are benefiting, then more competition might not do too much else if they are competing against themselves.

         Many think that mail could be delivered cheaper and more efficiently if companies were allowed to do so. But anything that resembles first class mail not shipped by the USPS is considered a federal crime. Monopolies affect the consumer through the idea that big business can decrease costs and provide a better product for the consumer. The opposite can also be said for monopolies though, who have been known for price gouging because of the lack of competition and need to lower prices. Monopolies can manipulate demand in order to get people to buy their products. The dealings consumers have with these businesses affect them through the economy and what products they buy and use. Cable monopolies can lead to higher cable prices, and internet monopolies can raise prices as well. Even thought America Online is not technically considered a monopoly, it does have prices higher than its competitors such as MSN and Earthlink, but since there are alternatives it cannot be considered one. Antitrust laws are there to try to protect consumers from bad mergers that might turn them into a monopoly. In any merger the two companies have to make sure this does not happen, and show that there is not a monopoly. This happened with AOL Time Warner when they merged together. Some people think the rules of monopolies for businesses in this high tech age have changed, and some even think that the antitrust laws should not exist at all. Each monopoly case should be looked at differently and how it benefits or doesn't benefit the consumer. Competition is competition, and that is the heart of business.

         Overall, it seems as if the whole goal of competition is to crush the enemy. If there were no goals to take over another company or to take away their customers then there would be no point in even being in the business. David R. Henderon said in one of his articles that he received in an email from a lawyer friend of his whose son asked concerning Microsoft, "Isn't that what businesses are supposed to do?" It is these kind of responses that get me thinking about why there are antitrust laws. They are meant to protect the consumer, but without this competition there would be no products for consumers. Competition is necessarily, the strongest win, the world is not fair and no one is always going to succeed.


Last Updated January 31, 2002