While Donald Trump’s poll numbers slump and Hillary Clinton continues to stumble in explaining her use of a private email server for official State Department business, Elizabeth Warren has plopped a major public policy option on the table. She has called for stronger antitrust action to restore competition to U.S. markets, from banks to cable operators to technology companies and health insurers.
In an election punctuated by insults and insinuations, Warren said, “Today in America, competition is dying. Consolidation and concentration are on the rise in sector after sector. Concentration threatens our markets, threatens our economy and threatens our democracy.” It’s only surprising that the presidential candidates haven’t raised the topic.
Warren gave the keynote speech at New America’s Open Markets program the day after she appeared alongside Clinton to endorse her. Her premise was that “reigniting competition” in a broad range of increasingly monopolized markets will benefit consumers, small businesses and workers.
“The first problem is that less competition means less consumer choice,” the Massachusetts senator said. “When consumers can purchase similar products from multiple competitors, they force market players to constantly seek out new ways to reduce prices and increase the quality of goods and services to get their business.”
Lack of competition “can lock out smaller guys and newer guys,” she said. “Google, Apple and Amazon have created disruptive technologies that changed the world, and every day they deliver enormously valuable products. They deserve to be highly profitable and successful. But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again.”
When competition declines, small businesses can be wiped out. Warren cited the “Walmart effect” created by a single company delivering more than 30 percent of the products Americans consume and controlling critical supply chains.
Key Facts From Warren's Speech:
- The number of major U.S. airlines has dropped from nine to four in the last 10 years, due to consolidations. Last year, those four airlines brought in a record profit of $22 billion.
- Five companies control more than 83 percent of national health insurance market.
- CVS, Wallgreens and Rite Aid own more than 99 percent of the drug stores in the U.S.
- Four companies own about 85 percent of the U.S. beef market, and three control nearly half of all chicken in the U.S.
- More than half of all cable and internet subscribers in America have service through Comcast, which has consolidated by buying up rival companies.
Concentrated markets tend to lead to concentrated political power, Warren asserted. “This is a big one, and it should terrify every conservative who hates government intervention.... Concentrated markets dominated by a handful of powerful players, on the other hand, don’t produce the consumer benefits that flow from robust competition. Instead, benefits are sucked up by a handful of executives and large investors.” Their lobbying, in turn, focuses on protecting their market advantage and resisting restoration of competition.
The ultimate victim of market concentration, Warren said, is America’s middle class. People at the top get richer, she claimed, while others struggle. “Concentration is not the only reason for rising economic insecurity, but it is one of them. Concentrated industries result in concentrated profits. It’s the ultimate price squeeze."
Her solution is to hold the line on what she called anti-competitive mergers, give close scrutiny to so-called vertical mergers and require all federal agencies to promote market competition. Warren also believes that businesses can’t be allowed to become “too big to fail.”
“For much of our history, Americans organized and protested against the forces of consolidation,” Warren concluded. "As a people, we understood that concentrated power anywhere was a threat to liberty everywhere. It was one of the basic founding principles of our nation. And it threatens us now.”
The market threat Warren points to is easily of greater consequence to average Americans than Mexican immigration or careless handling of sensitive emails. In the 90 days between now and Election Day, perhaps it will be mentioned on a presidential stage.