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Alegal monopoly,statutory monopoly, orde jure monopoly is amonopoly that is protected by law from competition. A statutory monopoly may take the form of agovernment monopoly where the state owns the particularmeans of production orgovernment-granted monopoly where a private interest is protected from competition such as being granted exclusive rights to offer a particular service in a specific region (e.g.patented inventions) while agreeing to have their policies and prices regulated.[1] This type of monopoly is usually contrasted withde facto monopoly which is a broad category for monopolies that are not created by government.
Jurisdictions have at various times imposed legal monopolies on variouscommodities, including salt, iron andtobacco. The EnglishStatute of Monopolies of 1623 was an early step in an English movement to convertletters patent from a method of rewardingroyal favourites at other than royal expense, to a method of encouraging inventors.
TheBritish East India Company (1600),Dutch East India Company (1602), and similar national trading companies were granted exclusive trade rights by their respective national governments (monarchs).Private interlopers were subject to criminal penalties, and the companies fought wars in the 17th century to delineate and defend their monopoly territories.
Legal monopolies onalcohol remain commonplace, both as a source of public revenue and as a means of control, and the monopolies onopium andcocaine, formerly important for revenue, were converted or reinstituted during the twentieth century to curb the abuse ofcontrolled substances. For example,Mallinckrodt Incorporated is the only legal supplier of cocaine in theUnited States.
The regulation ofgambling in many places includes an official monopolynational lottery orstate lottery. Where private operation is allowed, for example inhorse racing,off-track betting andcasinos, the authorities may license only one operator.
The early 19th centuryGibbons v. Ogden case weakened the steamboat monopoly that New York had granted, producing an exception for interstate commerce. However the laterSlaughter-House Cases established that a local law creating a legal monopoly did not violate the rights of other merchants in the United States.
TheNational Recovery Act to promote and legally enforce producer cartels was defeated inSchechter Poultry Corp. v. United States.
In the middle twentieth century many countries established a monopolybroadcasting agency, such asBBC,Radiodiffusion-Télévision Française, orRAI. Most large countries relaxed their law or privatized their state broadcaster late in the century.
In parts of theUnited States,AT&T had a legal monopoly on the provision oflocal telephone service and inlong distance until 1984 when local service wasvertically divested. The divestedlocal companies continued to be protected in lesser degree from competition in the local exchange market as apublic utility.
NationalPostal, telegraph and telephone service monopolies were enforced in many countries until the late 20th century.Telstra, for example, had a legal monopoly ontelecommunications in Australia.
As do the Post Office departments in many countries, theUnited States Postal Service has a legal monopoly on delivery of non-overnight letters.[citation needed]
In many cities bus service enjoys a legal monopoly, however some city governments have legalizedbus competition due to pressure from consumers who desire lower prices and entrepreneurs that would like to provide them.
Professional sports organizations such asMajor League Baseball are not legally protected fromindependent league baseball, but nonetheless are sometimes called legal monopolies on grounds that they are exempted fromUS antitrust law.
Professionallicensure as ofProfessional Engineers in the United States orChartered Accountants in the United Kingdom, does not limit the number of practitioners to one, but detractors sometimes call the system a legal monopoly anyway.
The creation ofSirius XM Radio by merger left the United States with only one licensed satellite radio broadcasting company. However, theUnited States Department of Justice decided that this was not harmful to competition, due to the presence of terrestrial broadcasters.
