Ordinary Americans Aren’t Hipster Antitrusters

Antitrust populists often treat corporate size and market concentration as presumptive evidence that something has gone wrong in a market.

New Brandeisian critics of the consumer-welfare standard want antitrust enforcers to give much greater weight to market structure and concentrated private power, citing concerns about large companies’ political influence, threats to small businesses, and social harms that go even beyond higher prices, lower quality, reduced innovation, or diminished consumer choice.

When the government wants to win antitrust lawsuits, it too typically begins by pointing to stats like Google accounting for 90 percent of US internet searches or Ticketmaster controlling 80 percent of major venues’ ticketing. But conventional antitrust analysis treats evidence of a dominant share as a starting point. It’s not in itself proof of unlawful conduct, consumer harm, or something that requires a policy response.

Where does the public stand on this? Do ordinary Americans regard the bigness of a company as a sufficient reason for government intervention?

A new NBER working paper by Ricardo Perez-Truglia and Jeffrey Yusof suggests not. It tests what factors drive support for antitrust enforcement among the American public. In a preregistered experiment of 4,016 US respondents, participants were assigned one of five real antitrust cases involving Google, Meta, Live Nation, Apple or eyewear company Luxottica. They were then randomly given information intended to change one of four beliefs about the company’s market share, the consumer harm allegedly caused by its conduct, the unfairness of that conduct, or the company’s general reputation.

Before the experiment, the authors asked a panel of antitrust experts to forecast the results. They predicted that perceived market share would be by far the most important driver of support for enforcement. Instead, the market-share treatment was the least consequential. Although it changed respondents’ beliefs about how dominant the company was, it had no meaningful average effect on general support for antitrust or support for the plaintiff in the assigned case.

What did encourage people to support antitrust action was evidence of consumer harm. When participants were told that the challenged activity could raise prices, reduce quality, inhibit innovation or leave consumers with fewer choices, they became more supportive of the plaintiff and of remedies including breakups and restrictions on business conduct. Some of those effects remained detectable when respondents were surveyed again a month later, and they also increased support for antitrust policy more broadly.

True, information portraying exclusive contracts, default arrangements, or other forms of lock-in as unfair also increased support for the plaintiff and for tougher remedies. Yet unlike the consumer-harm treatment, these did not increase support for antitrust enforcement more broadly. That pattern, again, is consistent with respondents judging such conduct case by case rather than treating dominant firms as presumptively culpable.

In one important respect then, the American public displays a much sounder economic instinct than progressive trustbusters. The American people can happily distinguish a large market share from evidence that there’s a problem.

Cato scholars have long warned against the assumption that a large market share is synonymous with either monopoly power or consumer harm—an assumption one of us called monopoly fatalism. A market share is a snapshot, whereas competition is a process. Historical case studies like Nokia, Internet Explorer, Kodak, and others have shown that even commanding market shares are routinely cannibalized by upstart firms offering better quality products or producing at lower cost. This margin of competition is typically called “creative destruction.”

Nor does a firm’s dominant market share at a given time imply harm. It may reflect a superior product, economies of scale, or network effects that increase consumer value and lower costs. And quite often, the supposed “market” that the company is said to monopolize is so narrowly defined by those worried about it that it has little grounding in economic reality.

The FTC’s case against Meta turned on such line drawing. The FTC argued Meta had monopoly power in “personal social networking services,” but the court thought that definition was too narrow. Accounting for substitutes like TikTok and YouTube, it found Meta’s market share wasn’t so high after all.

This new paper doesn’t test the popularity of more fundamental libertarian objections to antitrust law. I and several other Cato colleagues oppose our antitrust laws in principle, not least because they operate through vague statutes interpreted differently over time, undermine property rights, grant agencies pretty wide discretion, make for easy weaponization by political leaders, and persistently tempt enforcers to treat competitor complaints as evidence of something untoward.

But this new experiment establishes a narrower but important point. Support for antitrust intervention moved with information about consumer harm, not market share alone. This suggests the public are much closer to embracing the spirit of the more economically-grounded consumer-welfare tradition for antitrust interventions than the recent populist backlash against it.