CFA Calls on Senate to Challenge President’s Nominee for Justice Antitrust on Merger Mania

Allowing Giant Corporations to Merge Reduces Competition and Costs Consumers Dearly

Washington, D.C. – Today the Consumer Federation of America, an organization of over 250 nonprofit consumer organizations, called on Chairman Grassley and members of the Senate Antitrust Subcommittee to address the dramatic increase in market power enjoyed by a handful of corporations that affect commodities and services essential to American households.

CFA’s letter stated, “As dominant platforms occupy more and more of a product space, consumer choice declines, prices rise and innovation slows.  This is a key moment when America will choose between competition and an economy dominated by a handful of corporate giants.”

CFA urged the Committee to explore this matter with Makan Delrahim, who President Trump has nominated to lead the Antitrust Division of the Department of Justice.  There are three active reviews at present – ATT-Time Warner, Bayer-Monsanto, and Dow-DuPont – that are alarming indicators of an underlying trend about which the nominee must be examined.

While unlikely that the nominee will comment, these pending mergers raise serious concerns about excessive concentration and the abuse of market power that go far beyond the traditional antitrust framework and require a vigorous response if the United States is to avoid an economy where a handful of corporate giants dominate every sector.  The communications and agricultural sectors, which constitute extremely important household expenditures, are important examples of a powerful and deeply troubling trend.

“The pending mergers would lead to high market share of key components of bundles of complementary products, which in turn would afford leverage over the bundle.  In the communications space, AT&T controls key services, wireless and business data services, over which content flows. Allowing this control will only increase consumer costs,” said Mark Cooper, CFA’s Research Director.

“In the agriculture space, dominant firms combine control over genetic traits, chemicals and seeds.  Farmers are locked into the bundles and independent competitors are locked out, when access to any of the complementary components is denied. In the agricultural sector, the trait, seed, chemical bundle is the key input for the farmer that affects the product sold to consumers,’ said Thomas Gremillion, CFA’s Director of Food Policy.

Over the last twenty years a merger wave has brought the markets touched by these mergers to a precarious state from the point of view of competition.  They have all become highly concentrated and are also tight oligopolies by traditional economic standards, where four firms control more than 60% of the market.

Contact: Thomas Gremillion, 202-939-1010; Mark Cooper, 301-384-2204

The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.