We will assume that this is not a question about an actual case, but rather an inquiry into the halachic view on issues of monopoly (if not, we will need more details). This is not the forum to write a complete treatise on the Jewish approach to monopoly law. The answer also depends on local laws, since on a matter of public welfare such as this, Halacha accepts the law of the land as binding.[1] Nevertheless, we will provide a basic approach based on classical rabbinic sources to help explain how a Torah-based society handles such issues.
The biggest problem posed by your question is the matter of mispricing. If the proprietor raises prices 20% above an item’s going rate, he violates the Torah prohibition of ona’ah.[2] While the price may depend on different factors and may change, one may not create a monopoly, artificially changing the supply and demand equilibrium, and then claim that his price is the local going rate. (One may affect the prices mildly by deciding how much of his own produce to put on the market.[3])
The gemara[4] further forbids charging artificially high prices.[5] How is this different from the laws of ona’ah? The Aruch HaShulchan[6] understands that this is referring to manipulations to alter the market price. The gemara[7] also forbids creating a bogus scarcity of staple produce, irrespective of the pricing issue. Historically, there have been many regulations approved by leading rabbis to root out market abuses, including monopolistic practices.
Other than the impact on consumers, is there a problem of unfairness to competitors? The most acute issue in competition is when an “outsider” sets up shop where a local merchant is selling similar goods (hasagat g’vul[8]). Other than that, it is permitted to offer promotions or charge lower prices in order to gain more customers at the expense of others.[9] The gemara[10] explains that competitors can also offer promotions, and one cannot outlaw lowering prices because of the benefit to consumers.
An argument can be made that the situation you have presented is different, as seizing the available store prevents competition. Indeed, when one person’s business makes another’s untenable, the concept of pasik l’chiyutei[11] comes into play, which in some cases requires him to stop his activities. However, that occurs when the affected person already has a business and is financially pressured to give it up. In contrast, if a businessman simply arranges matters so that others decide it is not profitable to open a competing business there is no prohibition.[12] It is even possible that the “monopolist” had valid reasons to fear that the planned competition would have made his business untenable or otherwise have used unfair practices. In that case, preventing such competition would not be halachically or morally objectionable.
There is an approach that assumes that even an ostensibly good market phenomenon can be objectionable when done in a way that has negative side effects. For example, the Aruch HaShulchan[13] says that lowering prices to an unsustainable level is unfair to other proprietors who cannot follow suit. After all, the gemara[14] approved giving special incentives to the consumer only because it is possible for the other existing businesses to do likewise. Going a step further, one might contend that preventing a business from getting started (e.g., by making a potential venue unavailable) is also unacceptable. However, it is very questionable whether this would apply when the competition does not yet exist and therefore no one is impinging upon an existing livelihood. It is much more plausible, however, if the competing business already exists and is legitimately in need of a new venue.