Sprint Nextel, Verizon, AT&T and T-Mobile are examples of oligopoly companies that keep other competitors out of the market by working together. Together, these companies control 89% of the US cellular phone market, as of 2014.Continue Reading
Tim Wu wrote in the New Yorker in 2013, "Consider 'parallel exclusion,' or efforts by an entire industry to keep out would-be newcomers, a pervasive problem". Other industries in the United States that are controlled by an oligopoly are the credit card business (VISA and Mastercard) and toothpaste (Proctor & Gamble and Colgate-Palmolive). Canada has a similar problem with its cellular industry, and globally, seven companies control oil extraction and pricing, five of which are American.
By excluding potential competitors in the market, oligopolies have the power to control supply, demand and market pricing. This not only puts smaller businesses at a disadvantage in the market but also means consumers are subject to whatever these companies decide. However, as Economics Online puts it in their definition, "Although only a few firms dominate, it is possible that many small firms may also operate in the market." The world's markets are filled with monopolies and oligopolies that buy and own smaller brand names, so the power of a few large firms is not always obvious.Learn more about Corporations