Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Senator Elizabeth Warren addresses U.S. market concentration, competition concerns, (Jun 30, 2016)

By Michael Menzhuber, J.D., LL.M.

The status of competition in America, its effect on markets, and how to increase competition were addressed by Senator Elizabeth Warren in keynote remarks delivered at New America’s Open Markets Program Event in Washington, D.C. on June 29.

Warren began her remarks, entitled "Reigniting Competition in the American Economy," by providing examples of the rise in consolidation and concentration of U.S. airlines, health insurance companies, drug stores, and U.S. beef and chicken producers. She continued by discussing five reasons to be concerned about the decline of competition: (1) less competition means less choice; (2) large companies can lock out smaller and new companies; (3) small businesses can be wiped out when competition declines; (4) concentrated markets create concentrated political power to benefit the large companies; and (5) the decline of the middle class.

Noting that America faced this concern more than a century ago, Warren pointed out that the country addressed the issue through the creation of antitrust laws. However, she noted that in the 1970’s antitrust thinking changed such that the costs of less competition should be weighed against the claims for greater economic efficiency created by consolidation. As a result, the government largely stepped out of the way and let companies grow larger and larger.

Warren went on to say that, absent new legislation, which has been made difficult by a Congress awash in campaign contributions and influence peddling, the key to more competition is a president and executive branch willing to enforce antitrust laws in the way that they were originally intended to be enforced. She then discussed the following three ways to reinvigorate antitrust laws: (1) hold the line on anticompetitive mergers; (2) closely scrutinize vertical mergers; and (3) require all agencies to promote market competition and appoint agency heads who will do so.

In conclusion, Warren stated that "competition in America is essential to liberty in America, but that the markets that have given us so much will be corrupt and die if we do not keep the spirit of competition strong".

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