Statement by Open Markets before the U.S. House of Representatives Subcommittee on Antitrust on Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship
July 16, 2019
The following is a statement on the record by the Open Markets Institute before the U.S. House of Representatives Committee on the Judiciary Subcommittee on Antitrust, Commercial and Administrative Law On Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship on July 16, 2019.
“Wide-ranging concentrations of power within a few companies in the American economy hurt small businesses and the American economy as a whole. From pet food to coffin makers, peanut butter to eyeglasses, only a handful of companies control enormous shares of the economic activity in this country.
Small businesses, in particular, have been suffering over the past decades. The rate at which people start new businesses is half of what it was in the 1970s.2 According to Census Bureau data, there were only 433,000 new startups in 2016, a 22 percent decrease from pre-recession levels.
Monopolists, especially platform monopolists, can hurt small businesses and entrepreneurs in a number of ways. These including preventing competitors from even forming in the first place or deciding what competitors gain visibility and market access as well as exploiting their size or market share to drive competitors out of business. A particularly pernicious effect of monopoly can occur when a monopolist controls an essential intermediary to commerce. That bottleneck power gives it enormous power to dictate the actions of dependent companies and competitors.”