What is the difference between holding a monopoly and monopolization?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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A firm has a monopoly whenever it has enough of the market that it can control prices in that market or exclude competition.  To have a monopoly, a firm does not have to actually use that power.  Having a monopoly is not illegal.

Monopolization is illegal.  In order to be guilty of this, a firm must first have a monopoly.  But then, it must also have gotten that monopoly or be trying to maintain that monopoly through illegitimate means.  In other words, in order for a firm to be guilty of monopolization, it has to be engaging in conduct that tends to destroy competition and hurt consumers.

Thus, holding a monopoly can be seen as a passive state that is not illegal while monopolization is active cheating that is illegal.


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