New York Senate Attacks the American Monopoly Crisis

The American Economic Liberties Project released the following statement in response to a hearing by New York State Senate's Standing Committee on Consumer Protection's about necessary updates to New York's antitrust laws.

"The Twenty-First Century Antitrust Act, sponsored by Sen. Michael Gianaris, would tighten standards around the abuse of corporate power and help address the crisis of monopoly power," said Matt Stoller, Director of Research at the American Economic Liberties Project, in testimony before the committee. "The bill would deliver a strong statement that New York rejects federal case law limiting antitrust enforcement and expects to take action against monopolies. It is a model for other states and Congress to follow."

"The last time our markets were this concentrated, officials all over the country acted. We created administrative agencies at a state, local, and Federal level, everything from securities regulators to public utility boards. Most importantly, legislatures passed new laws and enforcers enforced. We will need this level of energy and commitment once again," added Stoller.

"In addition to making crucial changes to the standard for policing corporate abuse, The Twenty-First Century Antitrust Act also authorizes class action lawsuits under New York's antitrust statute, meaning New Yorkers themselves can organize against corporate abuse. And it increases criminal penalties for abusive anti-competitive activities. Passing this bill is a critical step in attacking our monopoly crisis," said Stoller.

Over the last five years, researchers have begun identifying and measuring the impact of concentrated power. Here's what they have found:

• Corporate consolidation costs the average American household $5,000 a year in lost purchasing power (Philippon, 2019).
• Median annual compensation--now only $33,000--would be more than $10,000 higher if employers were less concentrated (Harvard Law Review, 2018).
• The more concentrated the industry, the smaller share of the profits workers receive (Journal of Finance, 2020; Quarterly Journal of Economics, 2019).
• During the 2010 to 2014 recovery, the creation of net new businesses in just five metro areas was equal to that in the rest of America combined. This concentration of new investment is likely a function of concentrations of economic power (Economic Innovation Group, 2017).
• America's start-up rate has collapsed, falling by half since the 1970s (Economic Innovation Group, 2017; Brookings Institution, 2014).
• Concentrated hospital markets--which face less competition on quality and innovation--have been associated with significantly higher mortality rates and substantially worse patient outcomes (Martin Gaynor before the House Energy and Commerce Committee, 2018; Health Affairs, 2017).
• Google and Facebook have monopolized digital advertising, harvesting nearly 60 percent of U.S. advertising revenue, decimating newspapers, magazines, and other outlets even before the coronavirus pandemic (PwC, 2019). Roughly 1,800 local newspapers have disappeared in America since 2004 (UNC, 2018).
• There are fewer startups in states where a smaller number of companies dominate (Brookings Institution, 2014).