Competition policy

Lane Kenworthy, The Good Society
February 2026

Markets are the best institution we’ve come up with for coordinating an economy.1 Market competition drives resource allocation toward more productive firms, which get more revenues and profits, and away from less productive ones, which go out of business. This increases the economy’s efficiency and productivity. Firms in a competitive environment can increase their profits and make survival more likely if they innovate. Competition thereby boosts innovation. In these ways competition creates more, better, and less expensive goods and services for us as consumers. Competition also gives employees more exit options, incentivizing companies to offer better pay and work conditions.

Sometimes government needs to step in to ensure competition. It can do this in various ways. It can break up a large firm or prevent it from merging with a competitor. It can prohibit or penalize anticompetitive business practices such as output restrictions, price collusion, noncompete agreements, and others. In 1999, for instance, the federal government sued to break up Microsoft; the two parties ended up reaching a settlement in which Microsoft agreed to stop privileging its own internet browser in its widely-used Windows operating system. A third approach is for government to make it easier for new startups to enter an industry and for smaller firms to survive — by giving them special financing, advantaged tax treatment, exemption from regulations, or favoritism in government contracting.2 Sometimes government can help by scaling back a barrier to competition that it has put in place, such as patent rules and copyright restrictions.3

When and how should policymakers act to promote competition? Should developments in recent decades change the calculus?

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SHOULD WE WORRY ABOUT LARGE FIRMS?

The aim of competition policy, like any other type of policy, is to improve people’s wellbeing. The assumption is that more competition is best able to achieve that. We can’t directly observe the level of competition, so in practice policymakers’ choice of when to intervene tends to focus on the degree of concentration in an industry and on specific large firms.

Sometimes we can observe a large company behaving in a monopolistic fashion — increasing prices more than other firms in its industry, allowing product quality or customer service to deteriorate, spending more money on acquiring potential competitors than on research and development.

In other cases policymakers worry about how a large firm might behave in the future.4 By then it might be difficult for policymakers to change things quickly. Also, a large company may be able to use its position and assets to buy political influence, adding to the obstacles facing future policymakers.

The danger in acting too aggressively to prevent large firms, break them up, or dictate their behavior is that some are highly efficient and/or innovative. Compared to small and medium-sized companies, large firms tend to invest more in research, have more efficient supply chains, production processes, and distribution processes, employ more workers, pay higher wages, have better work conditions, and provide more job security. When sharing R&D, production facilities, marketing, and/or distribution reduces the average cost of making more of a product (economies of scale) or a variety of related products (economies of scope), large size can increase efficiency. And size give firms more resources to invest in innovation.5

Focusing on firm size might be misleading depending on the relevant market. A medium-size or even small firm might have a dominant position if its market is entirely local. A large company may face extensive competition if its market is a global one.6

Another argument for a lenient policy approach to large firms is that, historically, few have maintained a dominant position for very long. Of the 50 largest US-based companies in 2017, only 5 were in the top 50 a century earlier, in 1917, and only 15 were in that group in 1967.7

An additional consideration in favor of less aggressive competition policy is policymakers’ limited information and limited ability to foresee a policy’s long-term consequences.

US COMPETITION POLICY

Beginning in the late 1800s, in response to the rise of monopoly or near-monopoly firms in major industries such as steel, oil, and railroads, the federal government passed a number of laws intended to prevent them or limit their power. The Sherman Antitrust Act of 1890 prohibits “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce.” The Clayton Act of 1914 outlaws mergers and acquisitions that confer a monopoly position. Another 1914 law created the Federal Trade Commission (FTC), an independent agency with members appointed by the president and congress, to oversee competition policy. It shares this responsibility with the Department of Justice. In the mid-1930s Congress passed several laws making it more difficult for chain stores to threaten local “mom-and-pop” businesses.

By the 1950s, as the impact of World Wars I and II and the spread of television and cars made the United States feel more like a country rather than a loose collection of states and regions, Americans started to become comfortable with large companies. Proponents of aggressive antitrust policy focused their attention more on consumer welfare rather than protection of small businesses. The general direction of antitrust policy continued, though its application came to be more rules-based (“structuralist”) and less discretionary.

During this era the federal government — congress, the FTC, and the Supreme Court — broke up behemoths such as Standard Oil (1911), American Tobacco (1911), and AT&T (1984), prevented a host of mergers, instituted a number of barriers to the ability of large firms to compete against smaller ones, and more.

In the 1970s, concern about the scope and effectiveness of government in a variety of policy areas grew. New influential voices in competition policy argued for a narrower focus on consumer prices, with less attention to firm size and other aspects of firm behavior, such as innovation and creation of barriers to entry.8 The underlying assumption was that markets are much more effective than government policymakers at disciplining and incentivizing corporate behavior, so policy should err on the side of leaving things be. Also, globalization was seen as creating a competitive environment even where a firm holds a dominant position among US-based companies. Remedies shifted toward imposition of behavioral requirements on firms rather than splitting companies apart or blocking mergers.

In the early 2000s, in the wake of the dot-com bubble crash and the Enron scandal, American public opinion toward big business began to sour. The 2008-09 financial crisis and “great recession” likely furthered this shift. Figure 1 shows three indicators. The drop is especially large for satisfaction with “the size and influence of major corporations.”

Figure 1. Public opinion toward big business
Feeling thermometer: average score for “big business.” Question: “When I read the name of a group, we’d like you to rate it with what we call a feeling thermometer. Ratings between 50 degrees and 100 degrees mean that you feel favorably and warm toward the group; ratings between 0 and 50 degrees mean that you don’t feel favorably towards the group and that you don’t care too much for that group. If you don’t feel particularly warm or cold toward a group you would rate them at 50 degrees. If we come to a group you don’t know much about, just tell me and we’ll move on to the next one.” Data source: American National Election Studies (ANES), sda.berkeley.edu, series VCF0209 for 1964-2016, V202163 for 2020, V242141 for 2024. Some or a great deal of confidence: share of US adults responding a great deal or only some to the question “I am going to name some institutions in this country. As far as the people running these institutions are concerned, would you say you have a great deal of confidence, only some confidence, or hardly any confidence at all in them? Major companies.” Other response option: very little. Data source: General Social Survey (GSS), sda.berkeley.edu, series conbus. Satisfied with influence: share of US adults responding very satisfied or somewhat satisfied to the question “Next, I’m going to read some aspects of life in America today. For each one, please say whether you are — very satisfied, somewhat satisfied, somewhat dissatisfied or very dissatisfied. How about — the size and influence of major corporations?”. Data source: Gallup, “Big Business,” gallup.com.

In the 2010s, a growing number of observers, particularly on the left side of the political spectrum, began to argue for a more aggressive approach to preventing or breaking up large companies.9 Proponents contended that big banks and other financial companies had caused the great recession by taking on too much risk. They highlighted the rise of new tech firms such as Google and Facebook (now Meta) that held overwhelmingly dominant positions in their product market. They noted that the nature of some tech sectors, such as social media, is that network effects and switching costs — I’m better off if I use a service that lots of other people are using — are an increasingly important source of market power. They pointed out that when digital services are provided to consumers for free, such as Google’s internet search or a social media platform, prices aren’t a helpful outcome on which to focus.

Since around 1980 the creation of business startups has decreased fairly steadily, as shown in figure 2. “The single biggest factor driving down entrepreneurship,” Barry Lynn and Lina Khan argued in the early 2010s, “is precisely the radical concentration of power we have seen not only in the banking industry but throughout the U.S. economy over the last thirty years…. Regulators have done almost nothing to stop the great waves of mergers and acquisitions, with the result that control over most major economic activities is now more consolidated than at any time since the Gilded Age.”10

Figure 2. Business startups
Establishments born during the past year as a share of all firms. Data source: Census Bureau, “BDSEAGE – Business Dynamics Statistics: Establishment Age: 1978-2023,” Business Dynamics Statistics Data Tables.

However, the evidence doesn’t support this view. A common way to measure concentration within an industry is the C4 ratio — the combined market share of the four largest firms in the industry. The main source of data is the US Census Bureau’s Economic Census, carried out every five years. One study finds a rise in concentration in most industries between 1982 and 2012.11 But more relevant for competition policy, arguably, is whether more industries have become highly concentrated, with the market share of the top four firms reaching 80% or more. From 2002 to 2022, about 4% to 5% of industries in the US have been highly concentrated according to this measure. There was no increase over that period.12

And comparing across industries, the association between concentration and the startup rate is zero. In other words, startup creation isn’t greater in less concentrated industries than in more concentrated ones.13

Moreover, the number of new firms isn’t an end in itself. It’s a means to an end. The end we seek is more and better goods and services at lower prices. Given this, some contend that the slowdown in firm startups might not be a problem. Consider retail trade:

The fact that technology has enabled larger and more efficient firms in many nonmanufacturing sectors means there are fewer opportunities for small and new firms…. This is not about predation but about space for new firms in any particular industry. We see this trend in some industries, especially retail trade … but not because large firms abused their market power to kill startups. Rather, technologies such as software-enabled logistics systems and web-based e-commerce enabled the average retail firm to get larger, meaning there was less market space for startups unless they had something truly unique to offer or local convenience.

For example, it was once not too hard to open a book or music store…. Large specialty bookstores such as Barnes & Noble, and then later in the decade online retailers such as Amazon.com, and the rise of e-book sellers such as Apple’s iTunes store and Amazon’s Kindle, meant that more people bought books and music at large brick-and-mortar stores and at online stores because they could save money and have a wider choice of products.

We have seen the same dynamic with hardware stores. Forty years ago someone who was good with tools might think of opening a hardware store. Today they would likely think twice about doing so since big box stores such as Home Depot and Lowes serve this market very well, having gained market share from small, independently owned hardware stores. But they didn’t gain it by predation and unfair practices that crushed the little guy. They gained it by providing a much wider selection of products at a significantly lower price. The typical Home Depot store is around 105,000 square feet (almost the size of two football fields), more than ten times larger than the typical neighborhood hardware store. And the big box stores stock upward of 25,000 different products, significantly more than the neighborhood stores do. This volume lets them be much more efficient, with sales per square feet of store two-thirds higher than at neighborhood stores and 25 percent more per employee.

This story has played out in many retail sectors where large retailers have gained market share by providing goods or services that consumers want at prices they can afford. Owner-operator barbershops have been superseded by Supercuts, coffee shops by Starbucks, donut shops by Dunkin’ Donuts, stationery stores by Staples and Office Depot, local pharmacies by CVS and Walgreens. These retail giants have tapped into the substantial benefits of scale, which are passed on to customers.

Moreover, large retailers compete directly against each other, spurring innovation, technology investment and adoption, and efficiency.14

Consistent with the view that many large firms behave as though they are in a highly competitive environment, we’ve seen a significant rise in business spending on research even as business startups have decreased. Figure 3 shows this trend.

Figure 3. R&D spending by business
Business expenditures on research and development as a share of GDP. Data source: National Center for Science and Engineering Statistics, “National Patterns of R&D Resources: 2022-23 Data Update,” table 1, R&D by source of funding columns.

What about prices? If competition has weakened significantly, we might expect to see a rise in the rate of price increases. One influential study concludes that there has been an increase in price markups since 1980,15 while another concludes that “the results do not reliably provide a basis to reach clear conclusions about the evolution of market power in the United States.”16

If there was an increase in price markups, was it significant enough to cause an overall rise in prices? The inflation rate in the United States remained remarkably subdued, at about 2%, more or less continuously during the 1990s, the 2000s, and the 2010s. It increased in the early 2020s, but that’s generally agreed to have been caused by the disruption to global supply chains during the Covid pandemic and perhaps to some degree by the very large fiscal stimulus the federal government enacted in order to prevent the Covid-19 recession from becoming as severe and lengthy as the Great Recession.17

Also, if price markups did increase and the cause was large firms’ market power, we would expect to greater concentration to be associated with larger price markups across industries. But it isn’t.18

Another strategy for assessing the impact of market power is to examine the consequences of mergers that have been permitted. A recent study that does this draws three conclusions: “First, the competitive effects of mergers, as best we can assess them, are highly varied across industries and specific transactions…. Second, merger retrospectives are only available for a tiny fraction of all mergers and acquisitions, many of which are in just a few industries, so one should be cautious about reaching broad conclusions, one way or the other, from this body of evidence. Third, while merger enforcement has been imperfect, the evidence does not support the view that the public has been greatly harmed by decades of far too permissive merger policy policies.”19

What about monopsony power? Competition among employers for workers is one of economic processes that generates pay increases. In some industries in the United States, the number of employers is relatively small, or a small number of employers account for a large share of the jobs. Also, some American firms have pressured employees to sign a noncompete clause as a condition of employment, which prevents them from leaving the firm to work for a competitor. These two developments are likely to have reduced employees’ exit options, and hence their pay leverage.

How much has this mattered for pay growth in the United States? It’s difficult to tell. A key reason for skepticism is that there are so many other causes of slow pay growth in the US since the late 1970s, including union weakening, the implosion of the Soviet Union, globalization, automation, the shift to “shareholder value” corporate governance, and tight monetary policy.20 Each of these has given employers greater incentive and ability to oppose wage increases. Moreover, some analyses suggest that apart from some rural areas and small towns, few local labor markets actually have high levels of concentration.21

What about the political power of large firms? As Robert Atkinson and Michael Lind suggest, here too there is a skeptical take worth considering:

The claim that “the corporations” control government at all levels is commonly made in the United States. The case would seem to be undeniable, if corporate spending on lobbying and campaign donations is considered in isolation from other political spending and if it is assumed that lobbyists and donors usually get their way. But these assumptions are unrealistic. When all sources of financial influence on politics are considered, it is clear that big business competes for influence with individual wealthy donors, nonprofit organizations, and trade associations representing small business. Nor is it the case that big business always gets its way. Indeed, on many issues, from corporate tax reform to infrastructure investment and immigration reform, the corporate sector has experienced repeated defeat in American politics.

Some of the industries represented by trade associations with deep pockets are dominated by large firms because they are increasing-returns industries, like pharmaceuticals and cable and broadband. But the top spender, the US Chamber of Commerce, represents many small firms, and the number two lobbying spender, the National Association of Realtors, represents a highly fragmented industry in which the typical realtor’s office is local and employs only a few people. For its part, the American Medical Association has long represented the interests of physicians working alone or in small partnerships, who until recently accounted for most doctors. Lobbying expenditures, like campaign donations, probably exaggerate the influence of large companies and minimize the actual influence of small businesses. Much of the influence of small business arises from geography. In every congressional district and every state there are family farmers, franchise owners, automobile dealers, realtors, and others whose support politicians cannot ignore. In contrast, the headquarters and production facilities of major national and global corporations are found in a relatively small number of places. Every American state has family farmers and realtors; far fewer have automobile or aerospace manufacturers. Local businesses and their employees and suppliers provide the small business lobby with an unpaid auxiliary army whose influence is exercised through the ballot box rather than by means of campaign contributions.

To imagine that if the economy was made up just of small “yeoman” businesses, they would not lobby for programs to protect their economic interests, is to ignore political realty. Small car dealers would still lobby to prohibit large car manufacturers from selling directly to consumers. Small dairy farmers would still lobby for subsidies and trade protection. Organic food growers would still lobby to raise food prices by limiting the use of biotechnology-based crops…. Large firms are simply one of many kinds of special interests, in addition to small producers represented by powerful national trade and professional associations, nonprofit organizations such as universities and single-issue advocacy groups, and individual megadonors. If the goal is to get money out of politics, then the focus should be on comprehensive and direct campaign finance and lobbying reform, not on breaking up large firms.22

The most careful empirical study finds no support for the hypothesis that large firms’ market power has led to greater political influence:

Observers fear that large corporations have amassed too much political power. The central fact that animates this concern is growing economic concentration — the rise in the market share of a small number of top firms. These firms are thought to use their enhanced economic power to capture the government and undermine democracy by lobbying. Many scholars and activists have urged the use of antitrust law to combat this threat, leading a “political antitrust” movement that advocates explicit incorporation of political considerations into antitrust enforcement….

Our findings do not support the political antitrust movement’s central hypothesis that there is an association between economic concentration and the concentration of lobbying power. We do not find a strong relationship between economic concentration and the concentration of lobbying expenditure at the industry level. Nor do we find a significant difference between top firms’ and other firms’ allocation of additional revenues to lobbying. And we find no evidence that increasing economic concentration has appreciably restricted the ability of smaller players to seek political influence through lobbying. Ultimately, our findings show that the political antitrust movement’s claims are not empirically well-supported in the lobbying context.23

Lobbying isn’t the only means through which companies can influence policy, so this isn’t a conclusive assessment of the hypothesis that large firms have come to exercise greater political power in the United States. But this evidence on political influence suggests — like the evidence on industry concentration, research and development, product choice and quality, prices, and wages — grounds for skepticism toward the notion there’s been a significant rise in large firms’ market power with significant adverse consequences.

At the same time, even if the large-firms-have-become-much-more-powerful-and-harmful hypothesis turns out to be wrong, competition policy will continue to be vital for addressing particular problems in particular industries. One example is hospitals, where mergers in recent decades seem to have clearly reduced competition and increased prices.24

THE EUROPEAN UNION’S APPROACH

The European Union (EU) has tended to take a more interventionist approach to competition policy. It is more skeptical of the benefits of large firms. And it has been more willing to impose remedies, from fines to merger prevention to attempted breakup of large companies.

The United States has a number of large and highly successful information technology firms — Microsoft, Apple, Alphabet (Google), Meta, Amazon — whereas the EU has none. Some infer from this that America’s less aggressive competition policy approach is a key contributor,25 though there are potential alternative explanations, such as the prior existence of an information technology hub in Silicon Valley, the startup-conducive nature of the US financial (venture capital) system, and the advantage of having the domestic language also be the world’s dominant language.

The EU’s Digital Markets Act, passed in 2022, doubles down on its aggressive approach. The Act shifts competition policy for digital markets such as social media and internet search from ex post to ex ante. The rationale is that because digital technology moves so quickly and is so much more vulnerable to monopoly due to first-mover advantages in creating network effects, it’s best to prevent that from happening rather than to try to react after it has already happened. The Digital Markets Act “sets forward a series of rules that apply equally to these gatekeepers across a broad array of digital products and services. Specifically, the DMA imposes per se bans on practices that include self-preferencing, so-called ‘data misappropriation,’ failure to ensure interoperability, and cross-platform data combination without explicit user consent. And, as per se bans that automatically condemn this behavior, the DMA’s rules do not allow gatekeepers to defend their practices by offering such procompetitive justifications as, for example, that self-preferencing allows Google to integrate its Search and Maps products in a way that improves the user experience.”26

This is similar to the “structuralist” approach that characterized US antitrust policy and enforcement in the middle of the 20th century. It has some advantages. Implementation “becomes much more easily administrable and less reliant on technical industry expertise — conduct is unlawful in itself, without any need to consider procompetitive benefits or overall anticompetitive effects. What’s more, per se rules may also reduce the risk of capture by creating less wiggle room for enforcement in a way that limits the opportunity for regulatory abuses of discretion such as picking winners and losers.”27

However, in limiting policy administrators’ discretion, it also runs the risk of going overboard in constraining the expansion and success of large tech companies.

WHAT TO DO

Competition policy is good. Government’s ability to break up monopolistic or market-dominant firms, to prevent mergers that might severely reduce competition, to prohibit or penalize anticompetitive behaviors, and to provide support for small and medium-size businesses is helpful.

Competition policy also is difficult. We don’t have clear answers to questions such as how aggressive policymakers should be in preempting the emergence or expansion of dominant firms, whether competition policy should be size-neutral or focused on large firms, to what degree policy should be rules-determined versus discretionary, and how policy should adapt to new technologies and economic developments.

  1. Lane Kenworthy, “Economic Growth,” The Good Society. ↩︎
  2. Robert D. Atkinson and Michael Lind, Big Is Beautiful: Debunking the Myth of Small Business, MIT Press, 2018, pp. 334-342. ↩︎
  3. Dean Baker, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer, 2016. ↩︎
  4. Patrick Foulis, “Special Report: Competition. Trustbusting in the 21st Century,” The Economist, November 17, 2018. ↩︎
  5. Alfred Chandler, The Visible Hand, Harvard University Press, 1977; John Micklethwait and Adrian Woolridge, The Company: A Short History of a Revolutionary Idea, Modern Library, 2003; Philippe Aghion, Nick Bloom, Richard Blundell, Rachel Griffith and Peter Howitt, “Competition and Innovation: An Inverted-U Relationship,” Quarterly Journal of Economics, 2005; OECD, The Future of Productivity, OECD Publishing, 2015; Atkinson and Lind, Big Is Beautiful; James Manyika, Sree Ramaswamy, Jacques Bughin, Jonathan Woetzel, Michael Birshan, and Zubin Nagpal, “Superstars: The Dynamics of Firms, Sectors, and Cities Leading the Global Economy,” McKinsey Global Institute, 2018; Tyler Cowen, Big Business: A Love Letter to an American Anti-Hero, St. Martin’s Press, 2020; J. Bradford DeLong, Slouching Towards Utopia: An Economic History of the Twentieth Century, Basic Books, 2022; Jan Eeckhout, “Dominant Firms in the Digital Age,” Public Paper 12, UBS Center for Economics in Society, University of Zurich, 2022; Trelysa Long, “The Case for Cracking Down on Large Corporations and Promoting Small Businesses Is Deeply Flawed,” Information Technology and Innovation Foundation, 2024; Matthew Yglesias, “An Abundance Agenda for Antitrust Policy: Promoting Competition Is Good, Arbitrary Preferences for Smallness Not So Much,” Slow Boring, Substack, June 3, 2025; Matthew Yglesias, “Bigger Is Often Better: Competition Is Good, Smallness Isn’t,” Slow Boring, Substack, October 8, 2025. ↩︎
  6. Robert D. Atkinson, “The Myth of Local Labor Market Monopsony,” Information Technology and Innovation Foundation, 2021. ↩︎
  7. Jeff Kauflin, “America’s Top 50 Companies 1917-2017,” Forbes, June 29, 2021. ↩︎
  8. William E. Kovacic and Carl Shapiro, “Antitrust Policy: A Century of Economic and Legal Thinking,” Journal of Economic Perspectives, 2000. ↩︎
  9. Barry C. Lynn and Phillip Longman, “Who Broke America’s Jobs Machine?,” Washington Monthly, 2010; Barry C. Lynn and Lina Khan, “The Slow-Motion Collapse of American Entrepreneurship,” Washington Monthly, 2012; Nell Abernathy, Mike Konczal, and Kathryn Milani, eds., Untamed: How to Check Corporate, Financial, and Monopoly Power, Roosevelt Institute, 2016; Ben Casselman, “AT&T’s Merger Could Be a Bad Sign for the Economy,” FiveThirtyEight, October 25, 2016; Marc Jarsulic, Ethan Gurwitz, Kate Bahn, and Andy Green, “Reviving Antitrust: Why Our Economy Needs a Progressive Competition Policy,” Center for American Progress, 2016; Lina Khan, “New Tools to Promote Competition,” Democracy Journal, 2016; Derek Thompson, “America’s Monopoly Problem: How Big Business Jammed the Wheels of Innovation,” The Atlantic, 2016; Jonathan B. Baker, “Market Power in the US Economy Today,” Washington Center for Equitable Growth,” 2017; Rex Nutting, “America’s Most Successful Companies Are Killing the Economy,” MarketWatch, June 17, 2017; Joseph Stiglitz, “America Has a Monopoly Problem — and It’s Huge,” The Nation, October 23, 2017; Jay Shambaugh et al, “The State of Competition and Dynamism: Facts about Concentration, Start-Ups, and Related Policies,” Hamilton Project, 2018; Tim Wu, The Curse of Bigness, Columbia Global Reports, 2018; David Leonhardt, “Big Business Is Overcharging You $5,000 a Year,” New York Times, November 10, 2019; Robert B. Reich, “Does America Have a Monopoly Problem?,” Testimony to the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Senate Judiciary Committee, March 5, 2019; Carmen Sanchez Cumming, “A Primer on Monopsony Power: Its Causes, Consequences, and Implications for U.S. Workers and Economic Growth,” Washington Center for Equitable Growth, 2022; Groundwork Collaborative, “The Real Inflation Problem: Corporate Profiteering,” March 2022. ↩︎
  10. Lynn and Khan, “The Slow-Motion Collapse of American Entrepreneurship.” ↩︎
  11. David Autor, David Dorn, Lawrence F. Katz, Christina Patterson, and John Van Reenen, “The Fall of the Labor Share and the Rise of Superstar Firms,” Quarterly Journal of Economics, 2020, figure 4. ↩︎
  12. Robert D. Atkinson and Filipe Lage de Sousa, “No, Monopoly Has Not Grown,” Information Technology and Innovation Foundation, 2021; Giorgio Castiglia, Rodrigo Balbontin, and Trelysa Long, “Still Insignificant: An Update on Concentration in the US Economy,” Information Technology and Innovation Foundation, 2025. Industries are defined using six-digit codes from the North American Industrial Classification System (NAICS). Another study using different data concludes that concentration didn’t increase between 1994 and 2019: C. Lanier Benkard, Ali Yurukoglu, and Anthony Lee Zhang, “Concentration in Product Markets,” American Economic Journal: Microeconomics, 2026. A different data source, the Internal Revenue Service’s Statistics of Income, suggests rising concentration over the past century, according to Spencer Y. Kwon, Yueran Ma, and Kaspar Zimmermann, “100 Years of Rising Corporate Concentration,” American Economic Review, 2024. But here the problem for the concentration-reduces-new-business-formation hypothesis is that there is no reason to think the business startup rate has been decreasing for a century. ↩︎
  13. Robert Atkinson and Caleb Foote, “Monopoly Myths: Is Concentration Leading to Fewer Start-Ups?,” Information Technology and Innovation Foundation, 2020. ↩︎
  14. Atkinson and Lind, Big Is Beautiful, pp. 75-77. ↩︎
  15. Jan De Loecker and Jan Eeckhout, “The Rise of Market Power and the Macroeconomic Implications,” Working Paper 23687, National Bureau of Economic Research, 2017. ↩︎
  16. Carl Shapiro and Ali Yurukoglu, “Trends in Competition in the United States: What Does the Evidence Show?,” Working Paper 32764, National Bureau of Economic Research, 2024, p. 19. ↩︎
  17. Lane Kenworthy, “Macroeconomic Policy,” The Good Society. ↩︎
  18. Brian C. Albrecht and Ryan A. Decker, “Markups and Business Dynamism Across Industries,” October 22, 2025. ↩︎
  19. Shapiro and Yurukoglu, “Trends in Competition in the United States: What Does the Evidence Show?,” pp. 30-31. ↩︎
  20. Lane Kenworthy, “How to Ensure Rising Incomes When Labor Unions Are Weak,” The Good Society. ↩︎
  21. Robert D. Atkinson, “The Myth of Local Labor Market Monopsony,” Information Technology and Innovation Foundation, 2021. ↩︎
  22. Atkinson and Lind, Big Is Beautiful, pp. 220-226. See also Cowen, Big Business, ch. 8. ↩︎
  23. Nolan McCarty and Sepehr Shahshahani, “Testing Political Antitrust,” New York University Law Review, 2023, pp. 1169-70. ↩︎
  24. Yevgeniy Feyman and Jonathan Hartley, “The Perils of Hospital Consolidation,” National Affairs, 2016; Leemore Dafny, Kate Ho, and Robin S. Lee, “The Price Effects of Cross-Market Mergers: Theory and Evidence from the Hospital Industry,” Rand Journal of Economics, 2019; Zarek Brot-Goldberg, Zack Cooper, Stuart Craig, Lev Klarnet, Ithai Lurie, and Corbin Miller, “Who Pays For Rising Health Care Prices? Evidence from Hospital Mergers,” Yale Tobin Center for Economic Policy, 2024. ↩︎
  25. Coniglio et al, “A Policymaker’s Guide to Digital Antitrust Regulation.” ↩︎
  26. Joseph V. Coniglio, Lilla Nora Kiss, Giorgio Castiglia, and Hadi Houalla, “A Policymaker’s Guide to Digital Antitrust Regulation,” Information Technology and Innovation Foundation, 2025. ↩︎
  27. Coniglio et al, “A Policymaker’s Guide to Digital Antitrust Regulation.” ↩︎