Posted by The Washington Post
By Robert J. Samuelson
Competition is dying. That’s the latest complaint against American business. We have too many supersized firms, excessively large and unnaturally profitable. Dubious mergers, permitted by toothless antitrust laws, boost companies’ market power and squash rivals. The lifeblood of a dynamic economy is competition; its erosion — if true — would be a momentous event.
But is it true? Let’s see.
Superficially, there’s ample corroborating evidence. Facebook, Google, Microsoft, Apple and some other tech firms are massive and have dominant market positions in their chosen fields. Google — to take one obvious example — has about 90 percent of the Internet search market.
Mergers and acquisitions among large firms are also common, with antitrust laws providing only limited restraint. Just recently, the Justice Department (which shares antitrust enforcement with the Federal Trade Commission) approved the $69 billion health-industry merger between CVS and Aetna. Earlier, Justice challenged the $85 billion merger between Time Warner and AT&T, but a federal court backed the companies.
A number of studies indicate that economic consolidation — fewer firms providing goods and services — is occurring in many industries. The best-known report came in 2016 from President Barack Obama’s Council of Economic Advisers (CEA). It found that all U.S. corporate mergers and acquisitions totaled about $2.
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