US Consumers Have Fewer Brand Choices
Source: VOX
From:Taiwan Trade Center Chicago
Update Time:2019/01/18
Open Markets Institute has issued a new report that says corporate America is becoming increasingly concentrated. This monopolization is becoming prevalent in a wide range of industries such as cat foods, jellys, airlines, and cell phone providers; all of which have become dominated by a handful of companies in recent years. As an example of this just four companies control 97% of dry cat food, with one, Nestle, company holding 57% of the cat food industry. Nestle controls this much of the industry because it has 4 different cat food brands, which means that customers going to a store feel like they are seeing a lot of different choices. However, sense these brands have a single parent company creating a false impression of choice for customers. Experts call this a scam economy in which competition and choice is an illusion. In many industries the market share is held by just two companies an increase that has taken place since the turn of the century. Corporate concentration is an issue as it can lead to increased prices for consumers, as there are fewer options for consumers there is less pressure for competitors to keep their prices down. If corporate concentration and monopolies goes unchecked it can lead to a serious issue known as Monopsony.
Monopsony is when a single large buyer controls a huge portion of the market. This is the opposite of a Monopoly where the power is primarily held by the seller. Monopsony’s are problematic as means that a single company has an outsized control over suppliers and workers. Amazon is an example of a company that has the potential to become so large that it control what shipping companies charge it and becomes the main employer in specific areas meaning it has the ability to push employee wages down. If this happens it could lead to an overall drag on the economy as a whole. Though consumers may not be fully aware of their choice restrictions at this time, it is already an issue. Currently there are 4 cellphone network providers controlling 98% of the market, 2 of those companies (T-Mobile and Sprint) are proposing a merger. If this goes through the market of cellphone providers in the US will drop to 3.
Source:VOX
https://www.vox.com/2018/11/26/18112651/monopoly-open-markets-institute-report-concentration