New York can curb corporate monopolies: Albany should pass the 21st Century Antitrust Act to promote competition

New York’s working poor and middle class are struggling to keep up with the price inflation attacking their wallets and pocketbooks. According to January data for the U.S. Bureau of Labor Statistics, the Consumer Price Index for consumers in the New York area is up 5.4% for all items less food and energy. New Yorkers are paying even more for food and energy, which have experienced 8.6% and 13.3% year-over-year price increases in this area, respectively.

While most New Yorkers tend to view this politically and rush to either blame President Biden or former President Donald Trump for inflation, they are missing the most troubling and resolvable reason of all: the high concentration of corporate power that has allowed prices to rise significantly using the inflationary economic conditions to their own benefit by further increasing prices to pad their already record profits.

Take the flight prices at New York’s airports, for example, which were up by as much as 62% as of the second quarter of last year. With this being more than 50% higher than the country’s annual inflation rate, do these rampant price increases have more to do with inflation or the fact that four major airlines control about 80% of the marketplace and can thus keep costs high?

Some industry actions, such as Spirit Airlines’ proposed merger with JetBlue to create a stronger marketplace competitor, could help to lower costs, however the Department of Justice has sued to stop the move. JetBlue has already cut average fares from New York to Charleston by 20% and to Los Angeles by nearly 30%, increasing daily passengers from New York to each location by 54% and 87% respectively. That said, even with the added competition that this merger could stimulate, New York’s airline marketplace concentration problem isn’t going away anytime soon with just four companies still dominating the marketplace.

However, at least New York’s airports have some hope for more competition and reduced prices. Plenty of other industries, such as the state’s energy industry, have little to no short-term prospect for improvement.

Over the past two years, many New Yorkers’ energy bills have inexplicably and sporadically soared by as much as $300 a month. Some industry stakeholders are using countrywide price inflation as the excuse for these skyrocketing costs, but given how the one monopoly, Con Edison, still managed to increase its revenue by $300 million year-over-year, it seems there is more to the story than that.

Or how about food prices? Supply chain issues are without question a problem, but four or fewer firms controlling at least half the market for nearly 80% of our groceries is a bigger one.

Bigness doesn’t always equate to badness. Plenty of companies have amassed significant scale because of their unmatched ability to meet consumer needs. However, the examples we’re seeing today certainly aren’t that. We’re seeing corporate greed at its worst.

New Yorkers shouldn’t have to ration their food purchases, turn their heat off, or refrain from traveling because of monopolies taking advantage of the high barriers to entry in their industries. Legislators need to act, and they need to act now.

Last year, state Sen. Mike Gianaris and Assemblyman Jeff Dinowitz introduced the 21st Century Antitrust Act, which would have made New York the first state to establish an abuse of dominance standard. The bill would not have made it illegal for companies to be big; it would have merely made it illegal for them to use their size to unfairly compete against small businesses, which still are the backbone of the American economy and the economic engine that drives America’s economy.

New York hasn’t updated its antitrust law, the Donnelly Act, since 1899. A lot has changed about the composition of our economy since then, and the business and consumer protection laws it has on the books should reflect those changes.

That’s precisely why Small Business Rising, a coalition of nearly 30 small business organizations representing more than 150,000 independent businesses, supports the 21st Century Antitrust Act. This coalition wants Albany to update the law to “restore competitive markets and safeguard the ability of small businesses to compete and serve the needs of their communities.”

While the Legislature did not manage to pass this legislation last year, I urge the Assembly and Senate not to delay in considering this measure or a similar one in this year’s session. Nearly half of New York voters say the economy is their top concern. It’s time for their lawmakers to start acting like it by acting to address the root of the problem legislatively.

Arcuri is a former Democratic congressman from New York and former Oneida County district attorney