Focusing on whether a company is a monopoly misses the point. Oligopolies, where a few big companies dominate the market, also tend to wield some degree of market power. In theory, that can allow powerful players to jack up consumer prices, underpay workers and squeeze suppliers. — AFP
The heads of four of the US’s biggest technology companies – Alphabet Inc, Apple Inc, Facebook Inc and Amazon.com Inc – appeared before US Congress earlier last week to respond to criticism that they have too much market power. The hearing showed that lawmakers are beginning to understand what is and isn’t important when it comes to regulating these large businesses. And it also showed an increased focus on the most important area of antitrust policy – mergers and acquisitions and whether regulators have exercised enough vigilance.
In recent years, big tech has become ever more important to the US economy and US financial markets. The five biggest tech companies (the four that testified, plus Microsoft Corp) now represent more than one-fifth of the market capitalisation of the S&P 500. Their value has only risen in the coronavirus pandemic.
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