Given the recent FCC inquiry into "uncompetitive" practices by Apple (NASDAQ:AAPL) in regards to Apple not allowing some of Google's (NASDAQ:GOOG) products to work on Apple's own phone, and also as a result of my long standing thinking vis-a-vis all the flak (and massive European fines) Microsoft (NASDAQ:MSFT) has sustained as a "monopoly", I thought it was useful to bring out the following old gem from Ayn Rand. It's important to understand what a monopoly really is and isn't when discussing the issue of whether a company is one. This is because the high market share of Windows or Google Search was achieved, and is maintained, in a far different manner than how some liquor or casino baron in a developing nation locks in his position via political favor. It's a high market share achieved by delivering a strong product through skill and then constantly staying ahead of the competition. It's under intense competition, but winning, temporarily. This is far different from the coercive type of monopolies we should truly hate.
It is imperative that one be clear and specific in one's definition of "monopoly". When people speak, in an economic or political context, of the dangers and evils of monopoly, what they mean is a coercive monopoly - i.e. exclusive control of a given field of production which is closed to and exempt from competition, so that those controlling the field are able to set arbitrary production policies and charge arbitrary prices, independent of the market, immune from the law of supply and demand. Such a monopoly, it is important to note, entails more than the absence of competition; it entails the impossibility of competition. That is a coercive monopoly's characteristic attribute, which is essential to any condemnation of such a monopoly.
In the entire history of capitalism, no one has been able to establish a coercive monopoly by means of competition on a free market. There is only one way to forbid entry into a given field of production: by law. Every coercive monopoly that has ever existed - in the United States, in Europe, or anywhere else in the world- was created and made possible only by an act of government: by special franchises, licenses, subsidies, by legislative actions which granted special privileges (not obtainable in a free market) to a man or group of men, and forbade all others to enter that particular field.
A coercive monopoly is not the result of laissez-faire; it can result only from the abrogation of laissez-faire and from the introduction of the opposite principle- the principle of statism.
Apple's app store, Google Search, and Microsoft's Windows are not coercive monopolies, while the original AT&T (NYSE:T) was one in the past. As to the new AT&T, distributor for Apple's iPhone, one would have to examine their current regulatory regime, but as I understand it, it's a pretty competitive market these days in their wireless space.