A monopoly occurs when one person or company has most or all control over a service or product. They are prohibited throughout the European Union, and therefore we should start by saying that there are no monopolies in Spain. But that's how it is? The truth is that no.
Next we will clarify what are monopolies, what history do they have and we will give you some examples so that everything is clear to you. Go for it?
What are monopolies in Spain
If we look in the RAE the definition of monopoly tells us the following:
Concession granted by the competent authority to a company so that it may exclusively take advantage of some industry or trade. Market situation in which the offer of a product is reduced to a single seller.
In other words, Monopolies in Spain can be conceptualized as situations in which a company or a person has exclusivity in the market for a product or service.
For example, think of a sector such as fishing rods. There are some companies but the one that really sells, operates, etc. It is only one, which is the one that has 90% of the market. We could call that a monopoly.
This term is made up of two Greek words, mono, which means one or only, and polio, which means to sell. Therefore, a person who controls only an entire market (or market niche) would be defined.
What do monopolies in Spain imply?
Continuing with what we told you before, a person who controls the market, or a niche of it, implies that he himself (or the company) can establish conditions that are abusive. He can fix prices, make competitors have no chance to make themselves known, etc.
It is thus given a pposition in clear advantage, since being the one that controls that market, is the one that decides how much to sell it for, to whom, how to do it, and to hide those who can overshadow it.
And when would you have that position? It is said that when a company has between 50 and 70% of the total market share, or is the only one that provides a certain product or service, without there being a substitute for it, we would be a monopoly before.
Types of monopolies in Spain
Now, there is not just one monopoly, but there are several types of monopolies in Spain. Specifically there are four different ones that are:
pure monopoly
It is the one that occurs when a company has 100% of the total market share of the market. That is, it has no competition and can only be "bought" from it.
This is very rare to see anymore.
natural monopoly
It occurs when it is a company that obtains the demand for more than 50% of the market share.
This may be because this company does things better, because it offers more advantages or there is something that it does more efficiently than other companies in its competition.
Legal or artificial monopolies
They are the ones that arise because the creation of new companies in the market is restricted. How do you do that? Through public franchises, government licenses, patents...
tax monopoly
It occurs when it is the State that determines that a company is the one that markets or produces a product or service. Of course, the maximum objective of this is none other than to collect taxes.
The history of monopolies in Spain
The history of monopolies in Spain is not new. In fact, they existed when the State intervened in certain sectors of the economy (what we can say were fiscal monopolies). Examples of them are communications, energy, water, gas, transport...
While main purpose was to collect taxes, there is no doubt that a company was given absolute power. A client could not do anything but give up with what they were offered or not have what could be an important good.
With the arrival of the new functioning of the National Commission of Markets and Competition, called CNMC, in 2013, the monopolies began to disappear, since the Treaty on the Functioning of the European Union, in its article 102, prohibited them (as well as occurred in the Law for the Defense of Competition).
Today, those that remain are just some of the old management of the State but the objective is that these disappear in a short time.
Examples of monopolies in Spain
If you remember what we put at the beginning, monopolies are prohibited in the European Union, and Spain is not exempt from this prohibition.
However, they exist, and having seen the types that exist, you can get an idea of what they are.
Here we talk about a few of them:
Renfe
Renfe is known as a rail transport company. And until a few years ago we could say that it was a monopoly since it was she who controlled the use of the infrastructure that was needed to circulate.
In May 2021, SNCF entered the market, a French operator that offers, with a new infrastructure, the same service as Renfe, with which they will share the market. Does that mean that each one will have 50%? That will depend on what happens.
Aena
Another example that we can tell you about monopolies in Spain is Aena, the company that imposes airport fees on airlines when they use certain services.
It is currently the only one that operates in the management of Spanish airports and has 51% of the total market share, without anyone else.
Apple Lossless Audio CODEC (ALAC),
Why didn't you think of it this way? And yet the fact that iPhones and Macs can only be purchased from Apple indicates that we are facing a product monopoly.
Of course, just like Apple we could say other product brands. But in this case, Apple not only has exclusive products, but also has its own programs, exclusive features, etc. that no other offers.
As you can see, the monopolies in Spain are part of the country's history but it seems that little by little they are disappearing. Is it clear to you? Ask us in the comments if you have any questions.