Vertical Integration and the Market Power Crisis

30th April 2019 Off By binary
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The US economy suffers from a market power problem that has invaded many sectors, including health care, telecommunications, and technology. As firms become more powerful, they are able to profit by taking advantage of other economic stakeholders rather than growing the overall economic pie. Competition as America once knew it—firms working to provide better goods and services at lower prices in order to win over customers—is increasingly a thing of the past. Instead, corporations today attempt to secure such large stakes in their given market, and to exclude potential entry, so that they do not need to compete. This objective is made evident by a wave of mergers and acquisitions, which have largely gone unchecked by enforcers.

In “Vertical Integration and the Market Power Crisis,” Adil Abdela, Kris Karlsson, and Marshall Steinbaum explore vertical integration, or vertical mergers between firms at different stages of the supply chain. They define vertical integration and explore its threat, revisit historical enforcement trends that set the stage for our current market power crisis, and provide guidance as to how antitrust legislation must change going forward.

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