Publications / Policy Memo

Competition and Concentration: How the Tech/Telecom/Ecommerce Sector is Outperforming the Rest of the Private Sector

By / 11.29.2018

The U.S. economy almost certainly has a problem with rising market power. A bevy of recent economic studies show that concentration in many sectors of the economy has increased over the past 20-30 years. These increases in concentration have been convincingly linked to such economic ills as rising prices, weak productivity growth, stagnant real wages, slower job growth, weak investment, and falling labor share.

Indeed, there is little doubt that strong and consistent competition policy plays an important role in a market economy. Longstanding incumbents in a wide range of industries can exercise market power to choke off innovation and growth, protecting the status quo and driving up prices rather than benefiting workers and consumers.

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