Reviewed by Annapoorna | Updated on Sep 14, 2021



In an economy, a situation may arise where a particular company or a business organisation is the sole provider of a particular product or service. Such conditions can either be beneficial in terms of regulation and administration or can put the consumers at a significant disadvantage. Let us understand more about Monopoly in economics.

A monopoly refers to an economic situation where a specific company and its product offerings dominate a sector or industry. Monopolies usually result from the free-market capitalism and the absence of any restriction or restraints on that company.

A single company or conglomerate grows large enough to become the owner of all or nearly all of the market for a particular type of product or service. A market for the product would include supplies, infrastructure, materials or services used to make the product. Therefore the term monopoly signifies an entity that has complete or close to complete control of a market.

Competition Commission of India (CCI) refers to the regulatory authority that eliminates practices having an adverse effect on competition. Further, it promotes and sustains competition, protects the interests of consumers and ensures freedom of trade in Indian markets.


Recently in 2019, Google was under the lens of CCI for abusing its dominant position in Android OS. It failed to provide alternate versions of its Android mobile operating system for various mobile device manufacturers. A 14-page order released in June 2019 points out that the investigations wing of the CCI carries out an extensive probe in the case. Off late, the abuse of dominant position is seen and observed on various digital platforms too.

Why Monopoly is important?

One must know and understand the relevance or importance of 'Monopoly’ in an economy, especially as a consumer.

However, the abuse of a dominant position by the firms will be taken seriously and it invokes the attention of the CCI. Such firms can abuse using discriminatory practices either against consumers or producers. It also indulges in unfair competitive practices that erect high entry barriers for other firms into the industry or market.


Generally, competition is the most effective market aspect that ensures low prices and high quality of products for the consumers benefit. Barring some industries such as landline telecom services and electricity distribution, rest should have fair competition. The telecom and electricity distribution industries have economies of scale and large scope to justify the low levels of competition or monopolies.


CCI regulates the mergers and acquisitions among companies in the same business after thorough research. Accordingly, a monopolised market usually is unfair, unequal, and inefficient for consumers and hence could lead to loss of reputation for the company too.

Related Terms

Recent Terms