Standard Oil, the industrial empire of John D. Rockefeller and associates, controlled almost all oil production, processing, marketing, and transportation in the United States from 1870 to 1911. To achieve this position, Standard Oil used various unethical business practices to drive away competitors and establish a monopoly. Here are some of the unethical means that Standard Oil used to get a monopoly:
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Reducing the Prices of Oil and Its Products: Standard Oil reduced the prices of oil and its products to attract many consumers, hence establishing a strong customer base. This practice drove away competitors and facilitated the monopoly of Standard Oil Company.
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Secret Deals with Railroad: Standard Oil made secret deals with railroads to obtain favorable rates, which enabled it to compete effectively with other business enterprises that were charged high.
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Buying Out Competitors: Rockefeller began acquiring competing oil refineries and bought out, shut down, or bankrupted his competitors. This practice drove away competitors and facilitated the monopoly of Standard Oil Company.
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Controlling the Market: Standard Oil brought as much labor in-house as they could and focused on finding markets for refinery by-products. It also relied on its size to negotiate a railroad discount by promising 60 carloads of oil daily, which appealed to railroad owners wanting to maintain a high and steady volume. This practice drove away competitors and facilitated the monopoly of Standard Oil Company.
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Violating the Sherman Antitrust Act: Standard Oil violated the Sherman Antitrust Act, which prohibits monopolies and anti-competitive business practices. As a result, the Supreme Court found Standard Oil in violation of the act and ordered the company to break up into 34 independent companies.
These unethical practices enabled Standard Oil to establish a monopoly and control around ninety percent of the refined oil in the United States.
