Why does Ebay have a monopoly when anyone could build a site and undercut them?

It's because the market for auctions is winner takes all. As a buyer you don't care which site you go to, you are just after the cheapest price.

As a seller you can only use one site per item, and you go to the one with the biggest number of users and hence the greatest number of people trying to buy. The listing costs in most cases are dwarfed by the money you make from the competition.

So with flarm, its a case that people are going to go with one system, and that's going to be determined by the number of users, or its mandated by law.