May 26, 2022
Are Monopolies Really a Growing Feature of the U.S. Economy?
The Biden Administration has signaled that it is taking a tougher approach to antitrust law and regulations via the president’s Executive Order on “Promoting Competition in the American Economy” and his appointment of Lina Khan as chair of the Federal Trade Commission. In new research, Competition Economics Analyst Fred Ashton examines whether markets have really become more concentrated using newly released data from the U.S. Census Bureau’s 2017 Economic Census.
- The Economic Census shows almost no evidence that oligopolies and monopolies are the predominant market structure in the U.S. economy; most industries operate in a low-concentration, highly competitive environment.
- Based on the report’s data, this study finds that the distribution of industries with low, medium, and high levels of concentration remained largely stable between 2002 and 2017.
- Using the data, the study also finds that the aggregated average concentration ratio – the share of sales by the four largest firms – across all industries increased just 0.2 percentage points from 2002 to 2012; between 2012 and 2017, that ratio remained unchanged.
- Two recent studies from NERA Economic Consulting in partnership with the U.S. Chamber of Commerce and the Information Technology & Innovation Foundation draw the similar conclusion that markets have not become more concentrated.