Consumers are anxious about the economy, and it’s due not only to inflation but to market power that raises prices and reduces quality, variety, and innovation. Policymakers’ prescriptions for resolving the cost-of-living crisis have mostly ignored the role of antitrust policy, but waning competition is at the heart of these problems, writes Diana L. Moss.
Consumer anxiety in the United States is at its peak. High inflation due to high prices for food, healthcare, housing and energy; high labor and input costs; and high interest rates are a drumbeat in the daily lives of U.S. consumers. With a hyper-focus on economic investment and the business cycle, the role of consumer spending in supporting the economy often takes a back seat. Hobbling consumers with higher prices and less choice—and their effect on lowering spending power—threatens this vital role.
For example, consumer spending in 2026 accounted for a whopping 68% of U.S. GDP. “Consumers” aren’t just you and me. They are businesses too—often smaller ones—that buy labor, materials, and access to distribution to reach customers. Small business activity in the U.S. in 2026 accounts for 43% of GDP.
Yet there is no relief in sight. President Donald Trump’s hollow promises to address “affordability” in the run-up to the 2024 election have morphed into denials that there is a cost of living crisis at all. Moreover, instead of strong antitrust enforcement, the Trump administration has weaponized they laws by interfering in antitrust investigations to advance a political agenda, reward allies, and punish enemies. Consumer anxiety has only increased since 2024. As of June 2026, the University of Michigan’s Consumer Sentiment Index was “very pessimistic”—the lowest level in more than 50 years.
We are awash in proposals to combat the affordability crisis in the U.S. But most fall short. For example, they don’t acknowledge that market power has eroded consumers’ bargaining power and that antitrust enforcement is the major tool for restoring balance. There is also an exclusive focus on bringing down high prices when market power also erodes quality and variety for products and services—henceforth referred to as “choice.” Choice is a major driver of consumer anxiety. This article explains why policies should directly address all of these problems, not an amorphous concept of affordability.
The consumer psychology of high prices and less choice
The majority of Americans consider market power—what they also refer to as corporate greed or greedflation—as the leading cause of inflation. There is growing evidence that a decline in competition is a major source of high prices. Less competition enhances the ability and incentive of trading partners to exercise market power—namely, to raise prices (or cut wages) or frustrate rivals’ access to markets.
Powerful companies often remind consumers that they have lost bargaining power in the economy. For example, in the late 1990s, the Federal Trade Commission brought suit alleging generic drug-maker Mylan and others for monopolizing the market for anti-anxiety drugs. At trial, a Mylan executive reportedly said “’F’ those customers, they don’t set prices.” Then there are the Slack messages between Live Nation-Ticketmaster employees in early 2026, mocking customers as “so stupid” while the company was “robbing them blind…” with inflated, monopoly ticket fees.
Consumers well know that a lack of competition spurs more than just higher prices. Less competition eliminates the threat of competitors who deliver better service, higher quality, and more variety. A decline in service quality in the “annoyance” economy, despite more shopping channels and product categories, is particularly irksome to consumers, bringing home the reality that: “monopoly is the death of innovation, the death of variety, and the death of quality.”
Consolidation often eliminates quality. For example, studies show that hospital mergers not only raised prices but degraded the quality of patient care. The airline mergers in the 2000s and 2010s that created the “Big 4” carriers decreased quality through less flight frequency and cuts in service to smaller destinations. All of this means that consumers are forced to solve a hard and frustrating problem—coping with higher prices and a loss of choice—by asking: “How does my income keep up when there isn’t enough choice to get value for what I spend?”
This tough decision is made more difficult by consumer psychology and behavioral responses. High prices elicit resentment and frustration. But consumers can still move the puzzle pieces around, for example, by skipping a medical exam or buying stores’ private labels at the grocery store. When consumers face a shrinking assortment of products and services, however, consumers feel cheated, manipulated, and stripped of autonomy. This is a powerful psychological response that affordability policy should recognize.
Affordability proposals largely ignore market power
There is no shortage of proposed fixes for the cost of living problem that saddles U.S. consumers. Proposals include tax breaks, subsidies, price controls, regulatory rollbacks to encourage entry and increase supply, state-provided goods and services, and restructuring sectors through legislated break-ups. Many of these come with massive public price tags and most do little, if anything, to target market power. They may even worsen already limited competition in markets.
For example, consumers are unlikely to see the logic in swapping out private monopolies for public ones. This is especially true for essentials like groceries, where different retail models and product variety (brands vs. private labels) are part of how consumers manage their budgets to get value for their food dollars. As compared to antitrust enforcement, legislated one-size-fits-all breakups of major sectors like healthcare and beef are a blunt weapon. Arbitrary thresholds for what gets broken up and hasty divestments of assets risk unintended consequences in critical consumer-facing markets that push up costs and prices.
Then there are market interventions like price controls. Price controls mask scarcity and high demand conditions, creating surpluses and shortages, and discourage different business models and competition on quality and variety. Take proposals to cap the prices of resale concert tickets, which will create shortages in resale ticket markets. This will send consumers back to the Live Nation-Ticketmaster monopoly, where they face high ticket fees while eliminating competition in resale. These examples illustrate the risks of affordability proposals that do not acknowledge the problem of market power, the role of the antitrust laws, or that competition is vital for keeping prices fair and preserving consumer choice.
The Consumer welfare standard is the only way to tackle price and choice
Center-left Democrats flag the need for strong antitrust enforcement in fighting the war on cost of living. They are the only “camp” on the political spectrum to do it. They are roughly aligned with antitrust’s center-left through a broad reading of consumer welfare, the long-prevailing standard in antitrust. Under the standard, enforcers and courts assess the effects of anticompetitive consolidation and business practices on prices and the non-price dimensions of competition such as quality, variety, and innovation. Antitrust enforcement directly addresses the effect of anticompetitive consolidation and conduct on reducing consumer choice.
Not all political camps hold this view. For example, the far-left Anti-Monopoly movement disavows the consumer welfare standard in favor of predetermined tests for acceptable firm size, without identifying a specific competitive concern other than “bigness.” This approach does not directly target lowering prices, much less promoting consumer choice. Antitrust conservatives favor a narrow reading of consumer welfare to include only short-term price increases. By definition, therefore, they disfavor consumer choice.
The reality is that both the far left and conservatives buck what the courts have said about consumer welfare, prices, and choice. For example, in 2011, the Department of Justice forced the abandonment of the merger of wireless provider AT&T and T-Mobile, citing a loss of choice in plans and technology options. The DOJ successfully blocked the merger of passenger airline JetBlue and ultra-low-cost carrier (ULCC), Spirit, in part because it threatened competition on service, frequent flyer programs, and other non-price factors. Center-left proposals should grab this brass ring in appealing to consumers.
Takeaways for Policy Messaging
Policy proposals on affordability that address market power, antitrust enforcement, and consumer welfare should answer some basic questions. First, does the policy reduce the market power of large incumbent firms or protect them by discouraging new entry and hobbling smaller competitors? Second, does the policy increase price competition or interfere with market mechanisms that accurately reveal prices? Third, does the policy empower consumers with more choice, or strip away incentives to compete on quality and variety, and service by standardizing business and product models?
Policy proposals could also highlight several areas of antitrust enforcement that are particularly effective at promoting all aspects of consumer welfare, and especially choice.
Prosecuting Anticompetitive Agreements For Allocating Markets: Conspiracies don’t always involve schemes to fix prices. When rivals agree to divide geographic regions, customers, or product types, anticompetitive agreements directly reduce competition that produces diversity in quality and variety, and service.
Tighter Merger Control: Merger control is the first line of defense against monopolies and oligopolies. Stopping mergers between close competitors preserves independent product lines. Stopping vertical mergers involving large players prevents cutting off rivals’ access to distribution or inputs. Both preserve consumer choice.
Prohibiting Exclusive Contracts and Product Tying:Practices that limit the ability to buy from rivals necessarily reduce competition. Age-old methods for limiting competition is forcing customers into contracts to buy exclusively from a single, large player or requiring consumers to buy a related product as a condition of purchasing the product they need. These schemes directly reduce quality and variety, and service.
Preventing Ecosystem Lock-In: Many industries have digitalized their trading platforms where locking participants into the ecosystem is an integral part of the value proposition. Large digital platform operators have stronger incentives to prevent consumers from switching to competing platform and to prevent expansion of third-party rivals operating on the platform by limiting interoperability. These lock in effects directly reduce consumer choice.
The U.S. affordability crisis is about more than expensive goods and services. It is about a systemic loss of choice in critical markets that contributes to consumer anxiety. Antitrust is the most powerful tool for reining in market power that drives up prices and limits quality, variety, and innovation. Antitrust policy should, therefore, play a large role in all serious proposals for addressing consumers’ cost-of-living woes.
Author’s Disclosure: Diana Moss works for the Progressive Policy Institute. PPI is supported by corporations, individuals, and foundations such as the Lumina Foundation, Peterson Foundation, and Arnold Foundation. No funding source influenced the arguments expressed in this article or stands to benefit from them.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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