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REINVENTION

Break Up Corporate Monopolies: Restoring Real Competition in America

Proposed legislation: The Competitive Markets Restoration Act (bill text coming soon)

Breaking Up Corporate Monopolies: A Cost-Benefit and Policy Analysis

For most of the twentieth century, Americans took it as a given that no single company should be allowed to dominate an essential market. The Sherman Act of 1890 and the Clayton Act of 1914 were written to keep markets open and contestable. Over the past four decades, however, enforcement narrowed dramatically, mergers accelerated, and a handful of firms came to sit at the chokepoints of entire industries — online search and advertising, prescription-drug distribution, meatpacking, and local news. The Competitive Markets Restoration Act proposes a coordinated program to restore competition: tougher merger review, the breakup of firms that have crossed clear dominance thresholds, structural separation where a gatekeeper both runs a marketplace and competes inside it, and durable funding for antitrust enforcers. This page assesses what such a program could deliver, what it would cost, and where the strongest objections lie.

It is worth stating at the outset that the economics of concentration are genuinely contested. Some economists argue that rising "markups" reflect successful, productive firms rather than abuse of power, and that fewer than 5 percent of U.S. industries are highly concentrated by standard measures. That critique deserves a fair hearing and is addressed directly below. But the case for action does not rest on aggregate averages; it rests on specific markets where concentration is extreme, entry is blocked, and the harms — to consumers, workers, farmers, and small businesses — are documented.

The Mechanism: How the Act Would Work

The Act has four operating parts.

First, it would strengthen merger review. The 2023 Merger Guidelines jointly issued by the Department of Justice and the Federal Trade Commission already restored skepticism of deals that meaningfully raise concentration, more closely resembling the stricter guidelines of the 1960s and 1980s than the permissive standards that followed. The Act would codify the most important of those thresholds so they cannot be quietly reversed by a future administration, and would shift the burden of proof onto the merging parties in markets that are already concentrated.

Second, it would authorize structural separation in defined gatekeeper situations — for example, prohibiting a company that operates a dominant online marketplace, app store, or ad exchange from simultaneously competing against the businesses that depend on it. This is the "referee should not also be a player" principle.

Third, where a firm has been adjudicated to hold and abuse monopoly power, the Act would make structural remedies (divestiture, spin-offs) the presumptive cure rather than the behavioral promises that courts have historically preferred and that have a poor track record of restoring competition.

Fourth, it would fund the agencies. Antitrust enforcement is cheap relative to the economy it polices, and chronic underfunding has been a real constraint on bringing complex cases.

Big Tech: From Promises to Structural Remedies

The most consequential antitrust developments in a generation are unfolding in technology. In August 2024, the U.S. District Court for the District of Columbia ruled that Google had illegally maintained a monopoly in general search and search advertising through exclusionary contracts, and a remedies process followed to determine what structural changes would be required. In a separate case, a federal court in Virginia found that Google had monopolized key parts of the advertising-technology stack — the publisher ad servers and ad exchanges that sit between websites and advertisers — with a remedies decision pending.

The record is mixed, which is exactly why durable rules matter. The same enforcement wave that produced the Google rulings also produced a defeat: in late 2025 a federal judge rejected the FTC's monopolization case against Meta, concluding that once TikTok and YouTube are counted in the relevant market, Meta lacks monopoly power. The Department of Justice's case against Apple over smartphone-market practices survived a motion to dismiss in 2025 and is proceeding toward trial, and a major case against Amazon over its marketplace practices is likewise advancing. The lesson is that litigation alone is slow, expensive, and unpredictable. Clear statutory standards — particularly the structural-separation rule for gatekeepers — would give courts firmer ground and reduce the years of uncertainty that currently surround each case.

Big Pharma and the Middlemen

Few markets show the cost of concentration more clearly than prescription drugs. Americans take roughly the same volume of medicine as residents of other wealthy countries but pay far more, and the United States has the highest per-person prescription-drug spending in the world, according to analyses from HHS and the Commonwealth Fund.

A central culprit is the pharmacy benefit manager, or PBM — the middleman that negotiates between drug makers, insurers, and pharmacies. According to a Federal Trade Commission staff report, the three largest PBMs (CVS Caremark, Cigna's Express Scripts, and UnitedHealth's Optum Rx) processed nearly 80 percent of the roughly 6.6 billion prescriptions dispensed in the United States in 2023, covering on the order of 270 million people. These firms are vertically integrated with insurers and pharmacy chains, and the FTC found that rebate structures tied to a drug's list price can create perverse incentives to favor higher-priced medicines. Notably, the functions PBMs perform here are, in most other developed countries, handled by government or quasi-governmental bodies. The Act would apply structural separation to the largest integrated PBM-insurer-pharmacy combinations, breaking the conflict of interest at the center of drug pricing.

Food and Agribusiness

Concentration in the food system is among the most thoroughly documented in the economy. According to the USDA's Economic Research Service, the four largest meatpackers handle about 85 percent of all steer and heifer purchases and roughly two-thirds of hog purchases — Tyson, Cargill, JBS, and National Beef. The trajectory is stark: for cattle, the top-four share rose from about 36 percent in 1980 to 85 percent, and for pork from about 34 percent to 67 percent over the same period.

This matters in two directions at once. Dominant processors can squeeze the farmers and ranchers who sell to them, paying less for livestock, while exercising pricing power over the groceries consumers buy. In March 2024 the USDA's Agricultural Marketing Service finalized a rule prohibiting retaliation, discrimination, and deceptive contracting practices in livestock markets — a useful step, but a behavioral one. The Act would pair such conduct rules with merger review tough enough to stop further consolidation and, where warranted, divestitures to rebuild a competitive bid for farmers' animals and crops.

Media

Local news has collapsed alongside consolidation in broadcasting and the capture of digital advertising by a few platforms. As the ad-tech rulings against Google illustrate, much of the revenue that once funded local reporting now flows through intermediaries that take a large cut and face little competition. Restoring competition in digital advertising and applying ownership scrutiny in broadcasting are, in part, a press-freedom and civic-health agenda as much as an economic one.

Projected Impact and Figures

Quantifying the benefit of competition is inherently uncertain, but several anchors exist. A 2022 U.S. Treasury report concluded that corporate concentration and anticompetitive practices have suppressed wages and reduced workers' bargaining power, implying that pro-competition policy is also pro-worker. In drug markets, even modest erosion of PBM pricing power could translate into billions in savings given total U.S. prescription spending. In food, the gap between farm-gate and retail prices during recent years drew bipartisan attention precisely because so much of it accrued to a handful of processors.

The honest framing is this: the benefits are large but diffuse — spread across hundreds of millions of consumers and millions of small businesses — while the costs of action are concentrated and visible. That asymmetry is why reform is politically hard, not why it is unjustified.

Administrative and Implementation Considerations

Breakups are operationally demanding. Divestitures require carving apart shared technology, data, contracts, and personnel, and a botched separation can leave consumers worse off in the short run. The Act therefore would phase structural remedies, require detailed transition plans, and fund the agencies to supervise them. The single most important administrative reform is durable funding: complex monopolization cases take years and require economists, technologists, and litigators who can match the resources of the largest firms on earth. Filing fees on the largest mergers can defray much of this cost. Implementation also depends on the courts, which is why codifying clear standards — rather than relying on case-by-case reinterpretation of century-old statutes — is central to the design.

International Comparisons and Precedent

The United States is no longer the global leader in competition policy it once was. The European Union's Digital Markets Act now imposes structural-separation-style obligations on designated "gatekeeper" platforms, prohibiting self-preferencing and forcing interoperability — essentially the rule the Act would adopt domestically. On drug pricing, most peer nations achieve far lower prices through centralized negotiation rather than the U.S. system of opaque private middlemen. And America has its own precedent: the breakup of Standard Oil in 1911 and of the AT&T telephone monopoly in 1984 each unleashed new competition and innovation — the AT&T divestiture in particular is widely credited with helping enable the modern telecommunications and internet boom.

Comparison to the Status Quo and Alternatives

The status quo is not "free markets"; it is a regime in which a few firms write the rules of the markets they dominate. The main alternative to breakups is behavioral regulation — fines, conduct rules, and consent decrees. The historical record is discouraging: behavioral remedies are hard to monitor, easy to evade, and often leave the underlying structure of power intact. A second alternative is to do nothing and trust that technology and entry will erode incumbents over time; sometimes they do, but the search, ad-tech, PBM, and meatpacking examples show markets where entry has been blocked for decades. Structural remedies are more disruptive but more durable, because they change incentives permanently rather than policing them indefinitely.

Risks, Trade-offs, and Counterarguments

The strongest objection is empirical. The Information Technology and Innovation Foundation and others argue that economy-wide concentration has not meaningfully risen, that fewer than 5 percent of industries are highly concentrated, and that rising markups largely reflect higher fixed and intangible costs (R&D, software, design) at more productive firms — not abuse of power. On this view, aggressive breakups risk punishing success and could reduce the scale economies and investment that benefit consumers. This critique is serious and is the reason the Act targets specific, well-documented markets rather than concentration in the abstract.

A second risk is that breakups destroy genuine efficiencies. Some scale is good for consumers: large platforms can offer free services and low prices, and large integrated firms can lower costs. Poorly designed divestitures could raise prices or degrade products. A third risk is chilling investment: if firms fear that success itself invites breakup, they may invest less. A fourth is execution risk — antitrust agencies have lost major cases (the Meta defeat in 2025 being the clearest recent example), and overreach could produce both legal losses and political backlash. Finally, defining a "gatekeeper" or a "relevant market" is genuinely hard; the Meta ruling turned entirely on whether TikTok and YouTube belong in the same market, and reasonable experts disagree.

A credible reform program must hold these objections in view: target demonstrated harm, preserve real efficiencies, set clear and predictable thresholds so success is not punished arbitrarily, and accept that some cases will be lost.

Conclusion

Competition is not a luxury feature of the American economy; it is the mechanism that disciplines prices, rewards innovation, and protects workers and small businesses from concentrated private power. The evidence that every market is broken is weak — but the evidence that specific, essential markets are dominated by a handful of firms is strong, and growing. The Competitive Markets Restoration Act would focus where the harm is clearest, prefer durable structural remedies over unenforceable promises, and fund enforcers to do the work. It would carry real risks and real costs, and an honest case acknowledges them. But the deeper risk is the one we already live with: markets in which a few firms set the rules, and everyone else plays by them.

Sources

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