We have always thought of the problem of monopoly as a problem of size or of markets. We say that Facebook is a monopoly because it is too big, or because it is in the nature of networked markets to reward scale.
But what if the problem of monopoly were really a problem of firm governance?
We don’t hate monopolies in themselves; we hate them for what they do. They charge us higher prices or deliver us lower-quality products. They pay us less or make our jobs harder.
But what a monopolist does is determined not by its size or market position, for these things are just enablers, but rather by how the firm is governed.
The reason a monopolist chooses to charge a monopoly price, rather than the competitive price that it could still charge notwithstanding its monopoly power, has to do with monopoly of a different kind—not of markets, but of the boardroom. For a monopolist to exploit us, the firm’s board must be dominated by an interest or interests that are antagonistic to our own.
That is because, as I argue in a forthcoming book chapter, if all of a monopolist’s potential victims were to have a say in the firm’s governance—thereby breaking the monopoly in governance—then the monopolist would charge competitive prices notwithstanding its power to do otherwise.
Woodcock, Ramsi, "The Real Monopoly Is in the Boardroom" (2021). Law Faculty Popular Media. 58.