An analysis published Wednesday about corporate consolidation and political lobbying in the United States found that large mergers—particularly in Big Tech, the pharmaceutical industry, and the oil and gas sector—has increased corporate control of American democracy.\r\n\r\n\u0022Corporate concentration and antidemocratic political influence go hand in hand.\u0022\r\n—Report\r\n\r\nThe new research paper from the American Economic Liberties—entitled Project Democracy for Sale: Examining the Effects of Concentration on Lobbying in the United States (pdf)—was authored by Reed Showalter, an attorney and a fellow at the anti-monopoly group.\r\n\r\n\u0022Concentrated markets are bad for consumers, bad for workers, and bad for innovation. But this research suggests that the concentration crisis in America is even more than a purely economic problem—it\u0026#039;s also a democracy problem,\u0022 Showalter said in a statement.\r\n\r\n\u0022We urgently need to understand and contain the power that monopolies have over the rest of us,\u0022 he asserted. \u0022Lawmakers, enforcers, and leaders cannot afford to ignore the widespread harms from concentration any longer.\u0022\r\n\r\n\r\n\r\nThe report emphasizes that \u0022the bigger companies get, the more powerful they become. A large majority of Americans distrust concentrated economic power, and criticism of the world\u0026#039;s largest companies is a regular part of discourse within America\u0026#039;s political parties and around the world. Research has borne out the power of money in politics.\u0022\r\n\r\n\u0022Corporate lobbying works,\u0022 the paper continues. \u0022A number of studies show that the amount spent on lobbying positively impacts a firm\u0026#039;s equity returns and market share. Firms that engage in lobbying also appear to have lower effective tax rates than those that do not.\u0022\r\n\r\nGiven those conditions, Showalter examined the U.S. internet, pharmaceutical, and fossil fuel sectors. The paper notes that the first case study \u0022primarily includes digital platform companies like Google, Facebook, Amazon, and Netflix\u0022 and \u0022does not extend, for example, to internet providers and other internet infrastructure companies.\u0022\r\n\r\nThe researcher found \u0022a noteworthy relationship\u0022 between consolidation and political activity. Though the data is a bit limited—which the paper acknowledges, urging some degree of caution—it shows that \u0022in all three industries, concentration appears to predict elevated lobbying spending.\u0022\r\n\r\nAccording to Showalter:\r\n\r\n\r\nIn the oil and gas industry as well as among internet companies, the more market power a corporation acquires, the more it lobbies. In the pharmaceutical industry, the data is even more compelling. When pharmaceutical companies gained market power, they lobbied more, and when they lost market power, they lobbied less. One tentative conclusion from this analysis is that monopolies seek to acquire political power, whereas competitive businesses focus on competing with each other instead of dominating public rule-making bodies.\r\n\r\n\r\n\u0022In short, the results of this report suggest that not only is big business good at lobbying, but that bigger business leads to more lobbying,\u0022 the paper says. \u0022That means monopoly is a threat to representative democracy—and that protecting our democracy requires effective antitrust.\u0022\r\n\r\n\r\n\r\nThe report also addresses the political implications of Showalter\u0026#039;s findings—specifically, the suggestion that the negative impacts of industry concentration \u0022cannot be understood merely through the consumer welfare lens\u0022 and using that standard to govern antitrust \u0022allows practitioners in the field to ignore non-price effects\u0022 of companies consolidating.\r\n\r\nThe new research \u0022casts doubt on pure regulatory solutions that do not reduce concentration, since more lobbying can mitigate regulatory action or even turn regulatory choices into mechanisms to protect entrenched incumbents,\u0022 the paper says. \u0022If concentration begets political influence, then even a hypothetically economically efficient monopoly offering low consumer prices can still be an undemocratic usurper of political power.\u0022\r\n\r\nIn other words, according to the report, \u0022stronger antitrust premised on reducing corporate concentration should be understood not just as a mechanism to address market power problems, but as an anti-corruption measure in itself.\u0022\r\n\r\nConcluding that \u0022corporate concentration and antidemocratic political influence go hand in hand,\u0022 Showalter urges U.S. policymakers to recognize the limits of the consumer welfare standard when creating and implementing new regulations for major industries.\r\n\r\n\u0022The antitrust laws were a response to rising economic concentration, and the laws\u0026#039; framers recognized that concentrated economic power can poison our democracy,\u0022 he writes. \u0022This article is a starting point but hopefully also a reminder that antitrust is equipped and designed to grapple with the political ramifications of economic concentration. Those crafting and enforcing the doctrine should feel empowered to step into the shoes they were meant to fill.\u0022\r\n\r\n\r\n\r\nThe New York Times\u0026#039; \u0022DealBook\u0022 newsletter noted Showalter\u0026#039;s ties to President Joe Biden:\r\n\r\n\r\nShowalter\u0026#039;s report begins with an interesting acknowledgment, thanking Tim Wu, a former Columbia law professor who is now a technology and competition policy adviser at the White House. What\u0026#039;s more, Showalter works at the law firm founded by Jonathan Kanter, whom President Biden recently nominated to lead the Justice Department\u0026#039;s antitrust division. Showalter said that Kanter did not discuss the report with him and that his work as a fellow was separate from his day job. But he acknowledged more generally that the expansive approach to antitrust that his report advocated appeared to be ascendant in the halls of power.\r\n\r\n\r\nThe report comes as Congress is considering a package of antitrust bills advanced by the House Judiciary Committee in late June. Demand Progress executive director David Segal pointed out at the time that \u0022many members are reciting Big Tech\u0026#039;s talking points and pushing their amendments. This is why it is necessary that Congress act to break these companies up and diminish their power of speech, the economy, and our government.\u0022\r\n\r\n\u0022No matter what does or doesn\u0026#039;t emerge from Congress in the coming weeks or months, it is vital that the Biden administration use existing tools to rein in the power of these monopolies,\u0022 he added, calling Lina Khan, the president\u0026#039;s pick to chair the Federal Trade Commission, \u0022a tremendous step in this direction\u0022 and urging more similar actions that prioritize the public interest.