I remembered in my secondary school geography textbook there was an example of a bakery shop opening in a new town, which, for a while, had enjoyed good business since it had a captive market. Soon, a second one opened and half of the town’s population began patronizing it. Then, a third one started, and naturally some customers from the first two began to buy from it. By the time a fourth one was in business, the other three were lamenting at the newcomer on why he/she did not choose to open anything other than a bakery.
Assuming the town’s population remains unchanged, the quality of the bakeries is the same and everyone takes bread or cake daily; the more bakeries there are, the lesser revenue/profit each bakery would get, ceteris paribus, which explains the frustrations of the first three bakery owners. In economics, this is called competition, where various firms are offering similar products and/or services to a (or a few) market or population.
Competition is good for consumers as it gives them a huge range of product choices. In an economic sense, there is price discovery where there are agreed-upon prices of products between buyers and sellers, thus making them reasonable. Conversely, there are market conditions called monopoly where there is only one seller, and oligopoly, where there are only a few sellers.
While an oligopoly can be considered, to an extent, as competition, there are times where oligopolistic sellers would collude and fix prices that look fair on the surface, but they are not. Similarly, in a monopoly situation, the price of a product is determined on the whims and fancies of the sole seller, rather than free market forces. The collusion actions disrupt the price discovery mechanism and result in some distortions in the markets. This is why market regulators clamp down on such monopolistic and collusive actions to level the playing field and prevent extensive profiteering.
As consumers, we applaud the antitrust actions of regulators against monopolies and oligopolies to make product and service prices fair and affordable. On the other hand, however, as investors we prefer our equity holdings to be in monopolies and oligopolies because they reap in huge profits for shareholders. Very ironic indeed.
To make things more complicated, nowadays products and services are similar in nature but differentiated with one another, which also posed challenges to regulators as what is seen as antitrust by one party may not be seen as such by the other. For instance, in the 2024 lawsuit filed by the United States Department of Justice (DOJ) against Apple (and it is still ongoing), the DOJ alleged that Apple utilised its locked-down iPhone system to build a monopoly, to which Apple replied, among other reasons, that it did not possess a market majority to be claimed as monopolistic1. Apple is correct in a way: as of October 2025, the Apple iOS market share worldwide was just 27%, and compared to Android, the other competitor in the field, stood at 72.59%2.
From an investment standpoint, regardless of ideological considerations, shareholders in monopolistic and oligopolistic entities should remain cognisant of the potential impact from lawsuits and regulatory actions, as these factors may influence future profitability and operational stability.
Disclosure
The Bedokian is vested in Apple.
1 – Feiner, Lauren. Apple files motion to dismiss DOJ antitrust lawsuit. The Verge. 2 Aug 2024. https://www.theverge.com/2024/8/1/24211386/apple-motion-to-dismiss-doj-antitrust-lawsuit (accessed 3 Nov 2025)
2 – Mobile Operating System Market Share Worldwide. Oct 2024 – Oct 2025. GlobalStats. https://gs.statcounter.com/os-market-share/mobile/worldwide (accessed 3 Nov 2025)
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