11. The practice of monopolization was supported by Parliament
The EIC protected its trade interests by paying high taxes on many of the commodities in which it dealt, in exchange for legislation which granted it de facto monopolies, allowing it to charge higher prices. One area in which it maintained a monopoly was in the importation of tea to Great Britain. The high taxes it paid for the privilege resulted in heavy competition from smugglers, particularly the Dutch. By 1767 the EIC was losing nearly half a million pounds annually in the tea trade. Parliament agreed to refund the taxes paid on tea sold for consumption in England, but increased the taxes paid by British merchants on tea shipped to the American colonies.
Parliament also invoked the Townsend Acts, which included another tax on tea to be paid by the colonists. By 1773 the EIC was nearing bankruptcy (for reasons including disastrous policies in India) and persuaded Parliament to restore the refund of taxes paid for British consumption of its tea which had been repealed the preceding year. It also allowed the EIC to ship tea directly to the colonies, assigning agents there who would distribute the tea for consumption. The 1773 Tea Act actually lowered the price of tea to the consumer. EIC ships carrying tea to America found they were unwelcome when they arrived in Boston, and their cargo was disposed of in the Boston Tea Party.