Corporate Cartels are Back

Photograph Source: Tony Webster – CC BY 2.0

A century-plus ago, the U.S. economy was dominated by what were then known as “cartels,” “trusts” or “monopolies.”  According to one source, between 1897 and 1904 over 4,000 companies were consolidated down into 257 corporate firms. Among them were Standard Oil (40 refineries), AT&T (22 units), U.S. Steel (nine steel companies) and J. P. Morgan’s “holding” company, Northern Securities Company of railroad lines (from Chicago to the Pacific Northwest). These corporations ruled with vengeance, using predatory pricing, exclusivity deals and other anti-competitive practices to undercut smaller local businesses and gain market dominance.

Cartels or trusts are back and with an equal vengeance.  In 2017, Lina Khan, then at the Yale Law School and now chair of the Federal Trade Commission, published a critical essay, “Amazon’s Antitrust Paradox,” in the Yale Law Journal.  She provocatively stated: “Amazon is the titan of twenty-first century commerce.”  And added:

In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.

She then raised a deeper concern, noting that “the current framework in antitrust — specifically its pegging competition to ‘consumer welfare,’ defined as short-term price effects — is unequipped to capture the architecture of market power in the modern economy.” Going further, she argued, “We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output.”

Media attention has focused on growing public and political outrage in the U.S. and Europe over how “big tech” companies like Amazon, Apple, Facebook, Google and Microsoft are using their control over multiple business lines to favor their own products and to suppress rivals.  At a Congressional anti-trust hearing, Rep. David Cicilline (D-RI) insisted, “many digital markets are defined by monopoly or duopoly control.”  Pointing an accusatory finger, he argued: “Amazon, Apple, Facebook, and Google have become gatekeepers to the online economy. They bury or buy rivals and abuse their monopoly power—conduct that is harmful to consumers, competition, innovation, and our democracy.”


The website Digital History reminds us that “during the late 19th century, business competition was cutthroat. In 1907, there were 1,564 separate railroad companies in the United States, and two years later there were 446 companies manufacturing steel. … During the panic of the mid-1870s, 47,000 businesses went bankrupt.”  It then acknowledges, “In hard times, the competitive marketplace became a jungle and businessmen sought to find ways to overcome the rigors of competition.”  Between 1897 and 1901, more than 2,000 mergers took place in the United States. This horizontal integration reduced the number of competitive companies in an industry.

The increasingly cartel-dominated economy fueled the Gilded Age.  In response, the Progressives movement emerged, fostering what Teddy Roosevelt mockingly dubbed “muck-raker” journalist who investigated and publicized social and economic injustices.  They included Jacob Riis, Upton Sinclair, Lincoln Steffens, Ida Tarbell and Ida B. Wells. Progressives sought to elimination of government corruption, supported women’s suffrage, championed social welfare, racial justice, prison reform, civil liberties and prohibition. Many feared that concentrated, uncontrolled, corporate power threatened democratic government.  They argued that large corporations could impose monopolistic prices to cheat consumers and squash small, independent companies.  And these cartels could strongly influence both federal and state governments.

In 1887, Congress established the Interstate Commerce Commission (ICC) to stop discriminatory and predatory pricing practices. There years later, it passed the Sherman Anti-Trust Act (1890) aimed to limit anticompetitive practices, such as those institutionalized in cartels and monopolistic corporations.

Looking back, Elizabeth Laughlin reminds us: “As monopolies and oligopolies became more staple of the American capitalist economy at the end of the nineteenth century, the industrial leaders who controlled these companies were simultaneously becoming more prevalent in society.”  The outcome of this development marked the Gilded Age: “Their mass wealth and influence created a shift toward plutocracy.”

Now, more than a century later, the issues of corporate cartels and the new plutocrats are finding new resonance.


Perdue University economist John Connor defines cartels as “voluntary associations of legally independent companies that manipulate market prices or industry output in order to increase their collective profits.” He distinguishes between “private” cartels (i.e., “not protected by national sovereignty or by treaties”) and “international” cartels (i.e., those that have participants from two or more nations”).  He adds, “private cartels operate secretly to avoid detection.”

The notion of the U.S. as an increasingly “cartel” dominated economy is gaining academic and public credence.  Looking at one sector, the telecommunications industry, the journalist David Cay Johnston, writing in a 2012 New York Times op-ed, linked the issue of cartels to the deepening telecom crisis.  He argued, “what we’ve witnessed instead is low-quality service and prices that are higher than a truly competitive market would bring.” He went on, noting, “after a brief fling with competition, ownership has reconcentrated into a stodgy duopoly of Bell Twins — AT&T and Verizon. Now, thanks to new government rules, each in effect has become the leader of its own cartel.”  He added, “because AT&T’s and Verizon’s own land-based services operate mostly in discrete geographic markets, each cartel rules its domain as a near monopoly.”

Susan Crawford, a Harvard Law School professor, given credence to Johnston’s assessment of the telecom industry. In Fiber, The Coming Tech Revolution (Yale University Press, 2019), she observes: “A handful of private companies dominate last-mile data delivery in American cities. They choose the richest, densest areas to serve with expensive second-class services – not with malign intention, but with a detrimental effect on the country.”

Following merger after merger over the last two decades, the four corporations that make up the telecom cartel came to not only control wireline and wireless services but internet and streaming services as well and are moving to acquire media/content businesses and theme parks. Collectively, the total 2020 revenues of the four telecom conglomerates totaled nearly $430 billion. The individual telecom’s 2020 revenues are: AT&T ($181.2 billion), Comcast ($108.9 billion), Charter Communications ($45.8 billion) and Verizon ($131.9 billion). Their total “market value” is nearly $1 trillion.


Going unobserved, what’s happened in the telecom sector is reshaping other corporate sectors.  An insightful, if ominous, 2016 study by The Economist lays out the profound corporate realignment then underway. “Since 2008 American firms have engaged in one of the largest rounds of mergers in their country’s history, worth $10 trillion,” it reported. “Unlike earlier acquisitions aimed at building global empires, these mergers were largely aimed at consolidating in America, allowing the merged companies to increase their market shares and cut their costs.”

The magazine further clarified its findings, reporting that it “divided the economy into 900-odd sectors covered by America’s five-yearly economic census. Two-thirds of them became more concentrated between 1997 and 2012.”  Going further, it noted, “the weighted average share of the top four firms in each sector has risen from 26% to 32%.”

In March 2021, U.S. News released a study that updates The Economists’ findings.  It reports:

The four biggest airlines control about 65% of U.S. passenger traffic, five giant healthcare insurers control an estimated 45% of the market, pharmaceuticals are dominated by three major companies, the top four banks control about 44% of the market, the so-called Big Five book publishers control some 80% of the U.S. book market, and Google alone accounts for about 90% of web searches worldwide.

Four companies are estimated to control 80% of U.S. meat-packing; the top four brewers and importers control about 76% of the U.S. beer market.

These revelations came during Sen. Amy Klobuchar’s (D-MN), chair of the Senate Judiciary subcommittee on competition policy, held hearings in March to overhaul U.S. antitrust law.

The scale and scope of the corporate consolidation is suggested by following brief snapshots of various industrial sectors:


Four firms — American, United, Southwest and Delta — control 80 percent of U.S. passenger traffic.

Hospitals & Health Care

The Economist reports that “the health-care industry, where a cohort of pharmaceutical and medical-equipment firms make aggregate returns on capital of 20-50%. The industry is riddled with special interests and is governed by patent rules that allow firms temporary monopolies on innovative new drugs and inventions. Much of health-care purchasing in America is ultimately controlled by insurance firms. Four of the largest, Anthem, Cigna, Aetna and Humana, are planning to merge into two larger firms.”

A 2014 Harvard study finds that “the top three hospitals and  systems account for 77 percent of all hospital admissions.”  Unfortunately, it does not identify the three hospitals.


Walmart controlled 9.5 percent share of all 2020 retail sales, up from the 8.9 percent level it posted in 2019; it controlled 50 percent or more of grocery sales in 43 metropolitan areas and 160 smaller markets as of 2018; in 38 of these regions, Walmart’s share of the grocery market is 70 percent or more.

Amazon controlled 9.2 percent share of all 2020 retail sales, up from the 6.8 percent retail stake it held in 2019; however, it controlled 51.2 percent of total U.S. digital retail sales in 2020, up from 48 percent in 2019.


As For The People warns, “Six agricultural giants is set to threaten the safety of food and agriculture in America.”  These companies are Cargill, Archer-Daniels-Midland Company (ADM), Bayer, John Deere, CNH Industrial and Syngenta. However, it notes, “the merger of Dow with DuPont, Monsanto with Bayer AG, and Syngenta with ChemChina, will result in the control of more than 61 percent of commercial seed sales and 80 percent of the U.S. corn seed market

Eggs & Milk

Two firms — Dean Foods and the Dairy Farmers of America — control as much as 80-90 percent of the milk supply chain in some states and wield substantial influence across the entire industry.


One sector of retail sales rarely examined is eyeglasses. For The People reports that more than 200 million Americans are affected by visions loss. It reveals that Luxottica owns and manufactures eyewear and sunglass brands under such as Oakley, Ray-Ban, Persol and other designer brands. In addition, it owns most of major distribution chains like LensCrafters, Pearle Vision, Sears and Target Optical as well as the vision insurance company EyeMed Vision Care. Essilor acquired Luxottica for $24 billion in 2017.


Corning controls 60 percent of all the glass used in LCD screens; Owens Illinois holds a near monopoly over market for glass bottles in the U.S.; and Rexam, a British company, dominants the international supply of bottle caps and pharmaceutical bottles.

Any number of other sectors can be analyzed to reveal the same tendency toward consolidation.


Much attention has been on the top-tier “big tech” companies like Amazon, Apple, Facebook, Google and Microsoft.  However, as suggested, other sectors of the U.S. economy are increasingly consolidating.

The proposed federal legislation now being considered would set up a mechanism by which a giant conglomerate could be broken up if it didn’t comply.  In addition, it could significantly limit the ability of any of the big tech companies to complete large mergers and would mandate them to make it easier for users to leave their platforms with their personal data intact.  The current Congressional debate and proposed legislation needs to be extended to all sectors of the economy in which consolidation is occurring.

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at; check out