Monday, July 27, 2015

Monopoly Power in the Gravestone Business

See this short article from the Economist magazine.  The Roman Catholic archdiocese of Newark, NJ, started selling headstones to parishioners. This was quite profitable for the church, and, presumably, convenient for the parishioners.  But soon some local businesses sued the church accusing it of unfair monopoly practices.  It had a natural vertical monopoly position because it could bundle multiple goods and services associated with burial (religious services, gravestones, plots, etc.) and tax-exempt status that allowed it to undercut grave stone prices of other makers.  The plaintiffs lost the case, but in March Governor Christie signed a law that breaks some of the monopoly power by forbidding religious cemeteries from operating funeral homes or selling memorials.