At the Joseph Saveri Law Firm, we are one of the most recognized antitrust and global competition law firms in the United States, one that vigorously and successfully fights illegal monopolies and other collusive practices on behalf of classes of consumers and purchasers.
As children, we often played the fun board game Monopoly, where the winners followed rules and accumulated the most companies, property, and money—with no real harm to anyone. As adults, however, illegal monopolies are undesirable, and their adverse consequences are exponentially affecting everyone at a rapid rate.
In the late 19th century, America experienced a Gilded Age in which powerful monopolies such as oil and railroad trusts, dominated the U.S. economy, creating inequality and widespread discontent. These “trusts” were large, new corporations that effectively eliminated competition by absorbing competitors and supporters, thereby controlling their respective industries. To combat this excess, lawmakers enacted the Sherman Antitrust Act in 1890 to prohibit companies from illegally agreeing to restrain trade and to make it a felony to attempt to monopolize or conspire to do so. In 1914, Congress passed another vital antitrust law, the Clayton Act, which prohibited mergers and acquisitions that would substantially lessen competition or tend to create a monopoly. Also, in 1914, The Federal Trade Commission (FTC) was established as an independent administrative agency to protect consumers from these types of abuses and to promote competition.
Over many decades, these legislative actions, along with enforcement efforts from the FTC and the Department of Justice, greatly helped tamper illegal monopolies and created a more competitive, equitable business playing field. These efforts kept our economy as competitive, sustainable, and desirable as possible, which translated to fairer prices, income equality, freer markets, and robust economic efficiency for consumers and purchasers.
Starting in the late 1970s and early 1980s, however, due to increasingly lax legal antitrust enforcement combined with a shift toward a more “hands off” approach in the prevailing academic, economic, and political winds, this progress stalled and has reversed at an alarming rate. According to economists, from 1997 to 2014, corporate concentration increased in 80% of industries, by an average of 90%. And the number of DOJ antitrust cases has rolled downhill since the 1980s, with only a fraction of cases pursued compared to past years.
Consequently, some businesses today have turned into virtual monopolies or into oligopolies, where a handful of large companies dominate an industry and avoid vigorous competition with one another. Monopsonies, in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers, have also become more common and dangerous.
We now face making many essential and recreational purchases from a condensed group of fewer and fewer businesses, leading, at times, to price-fixing, ineffective distribution chains, forced consumer choices, and the elimination of smaller, independent businesses who are often more attuned to the communities they serve. Multiple studies have concluded that mergers and fewer companies lead to higher prices. And studies have concluded that in many instances, these mergers have not led to “efficiency” or “economy of scale.”
Monopolies have been particularly dangerous during the COVID-19 pandemic, when so many of us need access to fairly priced and widely available goods and services, especially regarding healthcare. Indeed, part of the pandemic’s access-to-critical-care-crisis has been due to hospitals recently merging at a rate of more than 100 per year, leading to hospital beds declining from 1.5 million in 1975 to roughly 900,000 in 2017.
At the Joseph Saveri Law Firm, our legal team is concerned about the danger of monopolies and their harmful effects, and we encourage you to learn more about these trends. As a successful antitrust litigation firm, we represent direct and indirect purchasers of pharmaceuticals, consumer electronics, banking and financial services, technology, and almost any other commodity you use in your daily life. We vigorously pursue illegal “no-poach” employment agreements to ensure employees in many industries receive competitive wages and unhindered job mobility. And we monitor Facebook, Google, and other market-dominating companies for any illegal monopolistic behavior.