For years, Americans have been told the free market is working just fine. But former Federal Trade Commission Chair Lina Khan is pushing back against that idea, saying that growing corporate consolidation is making life harder and more expensive for everyday people.
Fewer Companies, More Power Over You
In a recent video with economist and former Labor Secretary Robert Reich, Khan laid out how massive corporations now dominate key industries, leaving Americans with fewer choices and higher costs. “How ‘free' we feel is often tied to how we experience the economy,” Khan said.
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She continued: “Are you really free if your groceries are so expensive that you can’t afford them? Or if your boss can change your work schedule on a whim, or block you from getting a new job?”
According to Khan, the problem is extreme market concentration, when a few giant companies control an entire sector. For example, she highlights how only three corporations make over 70% of the cereal sold in the U.S., and three soda makers control over 90% of the soft drink market. Even the beef we buy likely comes from one of just three meatpacking giants.
“This lack of competition can give dominant players the ability to bully and coerce small farmers and manufacturers,” Khan said. “And it also gives them the power to overcharge you simply because you have fewer options of where to buy from.”
Khan noted that 75% of U.S. industries are now more concentrated than they were just two decades ago.
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Workers Get Hurt, Too
It’s not just consumers. Khan explained that concentrated markets also weaken workers’ bargaining power. When a few companies control an entire industry, workers often can’t move to better jobs because there just aren’t enough other employers around.
She pointed to the attempted merger between Kroger (NYSE:KR) and Albertsons (NYSE:ACI), which the FTC sued to block and won. “Because Kroger and Albertsons had to compete for their workers, they had to offer better pay and benefits.” Without that competition, workers would have had fewer job opportunities and less ability to negotiate for better pay or conditions.
Khan also criticized noncompete clauses that stop millions of workers, from security guards to doctors, from switching jobs or starting businesses. “Noncompete clauses can trap workers in abusive workplaces and stifle innovation,” she said, adding that they cost workers hundreds of billions of dollars a year.
A Threat To Public Health
Khan then warned that consolidation doesn't just hurt wallets, it can endanger lives. In 2024, hurricanes hit the factories of two companies that supply 85% of IV bags and solutions to U.S. hospitals. The result was a widespread shortage.
“That meant that if you got sick, or into an accident, you might not have the ability to get the lifesaving treatments you need,” Khan said.
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There have also been major shortages of medicines like antibiotics and cancer treatments, which she linked to consolidation and price hikes by drug companies and middlemen. “Millions of Americans are left rationing the medicines they need—or even skipping them entirely,” she said.
Not Inevitable, But A Policy Choice
Khan rejected the idea that this trend is just capitalism working as intended. “Having fewer and fewer corporations controlling more and more of their markets is not some inevitability,” she said. “It’s a result of policy decisions that our enforcers and regulators make.”
During her time at the FTC, Khan sued to block harmful mergers and cracked down on abusive practices. She said it was a start, but that more needs to be done.
“We need to keep demanding that our leaders vigorously enforce anti-monopoly laws to tackle unchecked corporate power.”
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