Legal monopoly
A legal monopoly exists when a provider is protected from competition by state regulations. The term legal monopoly is sometimes also used for markets in which the state acts as the sole supplier ( state monopoly ).
Types of Legal Monopolies
Time-limited and time-unlimited monopolies
Legal monopolies can be granted for a limited period - for example through patents or concessions - or they can apply for an indefinite period. The latter is mostly the case with statutory monopolies (as opposed to official administrative acts). Intercity buses , for example, were only allowed to be set up until 2013 if the transport requirement could not be served with existing means of transport ( Section 13 (2) No. 2 lit. a) and b) of the Passenger Transport Act ), resulting in a long-distance rail monopoly for an indefinite period revealed.
Legal monopolies in the narrow and broad sense
Legal monopolies alone can protect a provider from all competitors. For example, municipal service concessions are awarded to a private individual who then acts as a monopoly for waste disposal or the supply of electricity. Another example was the TÜV before the liberalization of the testing market.
If one understands monopolies in a broader sense, namely in such a way that they assign economic privileges not to a provider but to a group of providers, there are numerous other legal monopolies. In particular, this includes all admission restrictions on professions and activities.
- For example, in many countries only those who are licensed as doctors or alternative practitioners are allowed to offer healing services.
- Before the so-called pharmacy judgment of the Federal Constitutional Court was issued, in many German federal states the approval to open a pharmacy was made dependent on the officially determined need.
- In Germany, no one is allowed to offer legal advice without having passed the legal state exams and being admitted to the bar (this was unrestricted under the Legal Advice Act ; under the Legal Services Act , it is limited to legal advice as the main service).
- The sweeping monopoly prohibits third parties from offering sweeping services.
Legal monopolies and economic theory
In order to justify legal monopolies, it is often argued that the monopolized areas are natural monopolies ; State intervention is only a reaction to an existing market failure . Example: The ban on intercity buses , which are supposed to supply routes with an existing rail link, is justified by the fact that the rail network represents a natural monopoly; competition from buses is therefore “not economically viable”.
According to many economists, however, the monopoly only arises through state intervention.
In all cases where the protection of competition was abolished, competition actually developed, which in a certain sense proves the view that legal monopolies are only a reaction to natural monopolies.
In contrast to the natural monopoly, the harm and benefits of which for the welfare of society as a whole are controversial, there is no doubt that legal monopolies impair the welfare of society as a whole, at least for an unlimited period of time.
Therefore, non-economic reasons are usually given as justification, for example public health or protection against false legal advice.
Individual evidence
- ↑ Entry Monopol ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. on www.wissen.de.
- ↑ Vimentis Wirtschaftslexikon, entry: Natural Monopoly ( here online).
- ↑ a b Glossary of the Federal Ministry of Finance, keyword monopoly ( memento of November 10, 2011 in the Internet Archive ).
- ↑ Hagen Bobzin, article "Monopoly, natural" ( Memento from May 18, 2016 in the Internet Archive ).
- ↑ DiLorenzo, Thomas J. (1996), The Myth of the Natural Monopoly (PDF; 992 kB), The Review of Austrian Economics 9 (2).
- ^ Gabler Verlag (editor), Gabler Wirtschaftslexikon, keyword: natural monopoly ( online here ).
