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Bad Commerce: The “Old” Modern Problem Of Monopolies

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A monopoly, defined as too much control over a market, product, or trade route, is one of the oldest quirks of commerce, going back to 17th-century England.

A 2012 paper from Northwestern University describes the Case of Monopolies (1603) as a ward against royal overreach, stopping kings and queens from giving away excess power.

Yet, more than ever before, we seem to be living in the age of the monopoly, the realization of Hasbro’s cardboard nightmare of the same name. 

Tencent

In mid-April, the Financial Times complained about the cycle of replacement that seems to doom Chinese shopping giants every few years. First, there was Alibaba. Then, Wish came along. Now, Temu holds the top spot, as the price of shares in Jack Ma’s Alibaba continues to fall. 

Alongside fashion warehouse Shein, Temu sends out 600,000 parcels each day. 

It’s not the only Chinese company with a stranglehold on its sector. WeChat, the “everything” app Elon Musk wants to emulate with X/Twitter, is influential in its market, guided by tech monolith Tencent. The bizarre twist in this saga is that VIPs in the Asian country, in this case, the government, are also involved with Tencent.

There’s little chance of a break from that kind of market control. The Times indicated Temu’s fresh dominance might be permanent. 

Rival Operators

Competition is a casualty of monopolies in any industry. In the US, video gaming seems especially vulnerable to the creep of control. 

For instance, in 2022, Microsoft acquired Activision Blizzard for $68.7bn, meaning that it now owns landmark franchises like World of Warcraft, Call of Duty, StarCraft, and Diablo. Microsoft already builds the Xbox console for its Halo series, among other titles.

Microsoft’s overwhelming influence is hidden behind an illusion. With a vast bedroom development scene, gaming is open to all-comers. It shares this trait with casino gaming, a cousin industry that’s perhaps a little more accepting of competition.

The NJ online casino PlayStar notes on its website that there are “many” rival operators in the Garden State, encouraging the brand to get competitive with its welcome offers. These are introductory gifts that offer free turns on slot machines (for example).

In video gaming, success on the grandest of scales may involve joining up with major publishers. Then, no futures are guaranteed. Publisher EA’s habit of ending its franchises (and the studios behind them) became almost comedic in the 2010s.

Gold Rush

Let’s answer the ultimate question, namely, why do monopolies exist? It's because somebody allows them to. As mentioned earlier, the government is on board with Tencent, which makes it lord of its particular manor.

Companies gained control in much the same way during the era of kings and queens. However, command over natural resources and land arguably played a bigger role in who ruled what. The US gold rush of the 18th and 19th centuries is a good (later) example, although, it's easy to see how luck determined who gained a monopoly over the hills.

Whether Microsoft should be allowed to get any bigger is up for debate. It seems that the mega-corporations of dystopian fiction seem to be laying their foundations already. 

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