I don't know where you're getting that from. Monopolies are almost always created by governments; indeed, the original meaning of the word "monopoly" was an exclusive privilege granted by the king to sell a particular product. Cartels in free markets don't last because there is a strong incentive for cartel members to defect, since they can increase their profits by doing so; it takes governmental agreements (such as the Middle Eastern oil cartel upheld by the governments of the countries involved) to prevent such defection.
> Why compete when you can merge or buy the startup before they get big enough to bother you?
If the startup is a real competitor, in a free market its owners will be able to realize more upside by competing with you than by being bought by you.
> If you are the only one offering what they need then they have no choice, do they?
In a free market this won't happen: if there is enough demand, it is always in someone's interest to start a competing producer.
> Have you figured out the answer to that?
Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that.
And then prosecuted them under US antitrust legislation?
Standard Oil Company and the American Tobacco Company were also US Government monopolies?
That sound a little off.
Perhaps your use of "almost always" needs to be dialed back a notch .. or a lot.
"Free market" isn't a particularly well defined concept given the broad range of its interpretation and use, eg: Churchill's "Land is the mother of all monopoly" comment wrt land ownership dragging down a truly 'free' market., etc.
Standard Oil wasn't a monopoly either. There were other oil companies in the business. But Standard Oil was selling oil, at a profit, at lower prices and in greater quantities than any of its competitors. The competitors didn't like that and got the government to break up Standard Oil under antitrust law. Which, as I've said, made things worse for customers.
In other words, if the competition simply doesn't compete very well, or makes bonehead decisions, a company can get a large market share, yes. But "large market share" is not the same as "monopoly".
If you want a better example of government created monopoly, look at ISPs in many areas of the US, where for many years state and local governments gave one company exclusive rights to sell Internet access in particular areas. With the expected result that Internet access sucked as compared to areas where there was competition. Much of that has gone away now, and Internet access as a result is much improved in those areas.
Some goods are more and the mix of regulation, property right, …
There is no rule here.
Government granted monopoly.
> Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that.
We tried that in the 1800s. Have you read any history?
Really? Governments did nothing to interfere with markets in the 1800s? Have you read any history?
Fun fact: the first tactical bombing from an airplane was on striking mine workers in the USA.
If you are the only one offering what they need then they have no choice, do they?
Have you figured out the answer to that?