Government - granted monopoly - wikipedia Government - granted monopoly `` Franchise ( rail ) '' redirects here. For the process as applied in the United Kingdom, see Rail franchising in Great Britain. hide This article has multiple issues. Please help improve it or discuss these issues on the talk page. ( Learn how and when to remove these template messages ) This article 's tone or style may not reflect the encyclopedic tone used on Wikipedia. See Wikipedia 's guide to writing better articles for suggestions. ( July 2009 ) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. ( July 2009 ) This article has been nominated to be checked for its neutrality. Discussion of this nomination can be found on the talk page. ( December 2007 ) This article possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. ( July 2009 ) In economics, a government - granted monopoly ( also called a `` de jure monopoly '' ) is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service ; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement. As a form of coercive monopoly, government - granted monopoly is contrasted with a non-coercive monopoly or an efficiency monopoly, where there is no competition but it is not forcibly excluded. Amongst forms of coercive monopoly it is distinguished from government monopoly or state monopoly ( in which government agencies hold the legally enforced monopoly rather than private individuals or firms ) and from government - sponsored cartels ( in which the government forces several independent producers to partially coordinate their decisions through a centralized organization ). Advocates for government - granted monopolies often claim that they ensure a degree of public control over essential industries, without having those industries actually run by the state. Opponents often criticize them as political favors to corporations. Government - granted monopolies may be opposed by those who would prefer free markets as well as by those who would prefer to replace private corporations with public ownership. Contents 1 History 2 Patent 3 Copyright 4 Trademark 5 Directly mandated 6 Criticism 7 Examples 8 See also 9 References 10 External links History Under mercantilist economic systems, European governments with colonial interests often granted large and extremely lucrative monopolies to companies trading in particular regions, such as the Dutch East India Company. Today, government - granted monopolies may be found in public utility services such as public roads, mail, water supply, and electric power, as well as certain specialized and highly regulated fields such as education and gambling. In many countries lucrative natural resources industries, especially the petroleum industry, are controlled by government - granted monopolies. Franchises granted by governments to operate public transit through public roads are another example. Patent Main article : Patent A patent is a set of exclusive rights granted by a state or national government to an inventor or his / her assignee for a limited period of time in exchange for a public disclosure of an invention. The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims defining the invention which must be new, inventive, and useful or industrially applicable. In many countries, certain subject areas are excluded from patents, such as business methods and mental acts. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission. Copyright Main article : Copyright Copyright is a legal right created by the law of a country that grants the creator of an original work exclusive rights for its use and distribution. This is usually only for a limited time. The exclusive rights are not absolute but limited by limitations and exceptions to copyright law, including fair use. A major limitation on copyright is that copyright protects only the original expression of ideas, and not the underlying ideas themselves Trademark Main article : Trademark A trademark or trade mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities. Trademarks can act as a form of consumer protection that lowers the transaction costs between a buyer and seller who are not personally acquainted. Directly mandated Governments have granted monopolies to forms of copy prevention. In the Digital Millennium Copyright Act, for example, the proprietary Macrovision copy prevention technology is required for analog video recorders. Though other forms of copy prevention are n't prohibited, requiring Macrovision effectively gives it a monopoly and prevents more effective copy prevention methods from being developed. Criticism Opponents of government - granted monopoly often point out that such a firm is able to set its pricing and production policies without fear of breeding potential competition. They argue that this causes inefficiencies in the market place, such as unnecessarily high prices to consumers for the good or service being supplied. It has been argued that government - imposed price caps might avert this problem. Examples State Bar of Arizona Saudi Aramco British East India Company French East India Company Brewers Retail Theatre Royal, Drury Lane K -- 12 education Interest rates West Virginia American Water See also Coercive monopoly Legal monopoly Copyright Government monopoly Monopoly Natural monopoly Rent seeking Federal Reserve System References Jump up ^ Patents : Frequently Asked Questions, World Intellectual Property Organization, Retrieved on 22 February 2009 Jump up ^ The styling of trademark as a single word is predominantly used in the United States and Philippines only, while the two word styling trade mark is used in many other countries around the world, including the European Union and Commonwealth and ex-Commonwealth jurisdictions ( although Canada officially uses trade - mark pursuant to the Trade - mark Act, trade mark and trademark are also commonly used ). Jump up ^ Landes, William ; Posner, Richard. `` 7 ''. The economic structure of intellectual property law. p. 442. ISBN 978 - 0 - 674 - 01204 - 2. Retrieved 2009 - 08 - 18. - Subheading : The Economic Function of Trademarks p 166 External links Unnatural Monopoly : Critical Moments in the Development of the Bell System Monopoly by Adam D. Thierer Antitrust Policy As Corporate Welfare by Clyde Wayne Crews Jr ( PDF ) Antitrust Policy As Corporate Welfare by Clyde Wayne Crews Jr ( Google conversion from PDF ) Retrieved from `` https://en.wikipedia.org/w/index.php?title=Government-granted_monopoly&oldid=810143578 '' Categories : Market failure Monopoly ( economics ) Hidden categories : Wikipedia articles needing style editing from July 2009 All articles needing style editing Articles needing additional references from July 2009 All articles needing additional references Articles needing POV - check from December 2007 Articles that may contain original research from July 2009 All articles that may contain original research Articles with multiple maintenance issues All articles with unsourced statements Articles with unsourced statements from November 2015 Articles with unsourced statements from February 2011 Use dmy dates from February 2011 Talk Contents About Wikipedia Suomi 中文 Edit links This page was last edited on 13 November 2017, at 15 : 57. 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Question: what is an example of a government monopoly in the united states
Answer: State Bar of Arizona; West Virginia American Water