One of the tropes of the new progressive approach to antitrust is to count the number of companies in a proportion of a given industry and repeat that fact as though it is a self-evident problem. It is generally expressed formulaically: X companies control Y percent of the market for a given good.
- Earlier in the pandemic, Biden was upset about “four basic meatpacking facilities,” by which he meant four major firms that control around 70 percent of the beef market.
- In trying to blame grocery stores for inflation, Biden noted, “Four supermarket companies control over a third of the market nationally.”
- In trying to blame ocean carriers for inflation, Biden claimed he was “viscerally angry” that there are “nine major ocean-line shipping companies that ship from Asia to the United States.”
- In trying to blame oil companies for inflation, Pramila Jayapal said, “Seven oil companies made nearly $70 BILLION in profits last quarter alone.”
- Elizabeth Warren is sounding the alarm that United Health Group “wants to control 10% of the home health market.”
- “The ‘Big Five’ book publishers control 90 percent of the market,” Warren has warned.
- “Only four companies control nearly 90% of the infant baby formula industry,” Warren has said.
- Warren: “Just four airlines control 80% of the airline industry.”
- Warren in February 2022: “Four companies control over 80% of the market for hearing aids.”
- Warren in July 2022: “the big 5 manufacturers” of hearing aids “control over 90% of the market.”
- “Anybody on the internet knows that Facebook has monopoly power,” Warren tweeted, with no hint of irony. “They control 85% of social network traffic.”
- Warren: “Five companies control more than half of global semiconductor manufacturing.”
- Warren: “Four big corporations control more than half of the poultry market.”
- Bernie Sanders: “Comcast is one of the eight multinational media companies that control the news you watch, read, and hear.”
- Sanders: “Three drug companies control 90 percent of the insulin market.”
- Sanders was counting the meat companies back in 2019: “We must end the absurd situation where just four packing companies now control more than 80% of the beef market and 63% of the pork market.”
- “Today Wall Street speculators control nearly 80% of the oil futures market,” Sanders said in 2012.
- Sanders in October 2022:”three pharmaceutical companies increased their profits by 90%.”
- Sanders in February 2022:”In 2020 alone, the six largest drug companies in the U.S. made nearly $50 BILLION in profits.”
Some of these markets have problems, and some of them do not. The ones that have problems are largely because of government involvement, baby formula being a prime example. Airlines face less competition than they otherwise would because the government protects the domestic market from international competition.
But the reason markets have problems is not the number of firms. The sign that something is wrong is that consumers are being harmed. Courts and legal scholars for decades have adopted and refined the consumer-welfare standard to keep antitrust enforcement focused on what matters.
As these examples illustrate, the company-counting method is completely arbitrary. Progressives don’t say how many companies would need to control what proportion of the market for them to be satisfied that it is competitive enough. They just find an industry they don’t like, count the companies, and say, “See?”
You’ll note that none of them is concerned about market concentration in the domestic water-transportation industry, which is caused by the Jones Act and supported by unions. It doesn’t irk them that one corporation controls intercity passenger trains and another controls mail delivery, because they have no problems with government monopolies. Most progressives oppose school choice, thereby supporting the government monopoly on primary education.
If the absurdity of the company-counting method weren’t already apparent, Biden jumped the shark yesterday with a tweet that began as follows: “Folks, right now, 25 of the largest pharmaceutical companies in America control 70% of the market.”
Now 25 companies aren’t enough? They’re making it up as they go along.
Before the consumer-welfare standard, there was a different standard in antitrust law: “The government always wins,” as Supreme Court justice Potter Stewart quipped. The consumer-welfare standard is the result of having learned from past mistakes and protects the economy from the arbitrary whims of politicians. There is no number of companies controlling some percentage of a market that will satisfy politicians who are going after an industry they hate — and no amount of concentration they won’t tolerate in an industry they like.