How Monopolies Leverage Systemic Racism to Dominate Markets

Locating Noxious Facilities in Communities that Lack Political Power

In some sectors, monopolies have gained market dominance in part by locating harmful or polluting facilities in communities that lack the political sway and resources to effectively push back. These are often poor communities, and often predominantly Black and Latine or Hispanic communities.

Stripping Communities of Local Businesses and Basic Services

Once a local grocery or pharmacy has been muscled out by a dominant chain, or a large bank buys up neighborhood branches, they often abandon communities, either closing the stores or never filling the vacancy their monopoly tactics created. This allows dominant corporations to consolidate market share even as they cut costs.

Exploiting Workers of Color

Monopolies can use their power not only to fleece consumers but also to steal from workers. The concentration of employer power has driven down wages, degraded working conditions, and forced many people to rely on precarious “gig” jobs. People of color have borne a disproportionate share of this theft.

Imposing High Prices and Substandard Services on Communities That Have No Alternatives

Not all dominant corporations abandon communities of color, particularly when there is profit to be made —  by dominant Internet Service Providers, by big banks profiting from payday lenders and predatory municipal finance, by dollar store chains, by private companies securing monopoly contracts in the prison system — by setting up a two-tiered system that provides worse quality and charges higher prices.

Using Surveillance and Algorithmic Discrimination to Manipulate and Profit from Communities of Color 

By harnessing their unprecedented ability to amass and exploit data, Big Tech companies have pioneered new strategies for entrenching their power at the expense of people of color. Amazon also uses surveillance to monitor its warehouse workers and, until recently, Amazon Ring held partnerships with over 2,000 law enforcement agencies, which means they were handing over video surveillance without warrants and thus fueling racist policing. Big Tech also profits from producing algorithmic bias and discrimination, such as Facebook allowing advertisers to exclude Black homebuyers from seeing ads in affluent neighborhoods. As the research and advocacy organization Demos reported in 2021, “The algorithms and automated decisions that characterize data capitalism are based on data that reflects [the] deeply inequitable status quo.”

Blocking the Public Options that Compete with Dominant Corporations

Smaller companies aren’t the only competitive targets of monopoly power. Public goods, which are so essential to racial liberation and equalizing economic well-being, are also a threat to corporate control. Dominant corporations have used their political influence to roll back existing goods and block new forms, all while designing regulations that favor their dominance.

To create an antimonopoly vision and policy framework that fully integrates racial justice, three broad elements are required. These economic policies are not sufficient for repairing historical racial harm in the U.S. and advancing the struggle for civil rights. For that, we also need criminal justice reform and voting protections, not to mention policies that address gender justice, particularly for women of color. What we are presenting here is a policy framework designed to dismantle the ways that corporations leverage structural racism to advance their dominance.

First, antitrust itself must be guided by a primary commitment to safeguarding the economic liberty of all Americans. Broadly, this means that enforcement must follow the vision and goals of the antitrust laws — namely dispersing economic power, promoting fair competition, and enhancing community self-determination. From the 1980s until very recently, antitrust enforcers ignored these goals. They dismissed concerns about fairness and freedom and focused narrowly on misguided notions of efficiency. The result was a permissive approach that furthered corporate concentration and deepened its racialized impacts. Fortunately, a reanimation of antitrust is already underway, led by the Biden Administration and guided by a 2021 executive order that declared that concentrated corporate power is “denying Americans the benefits of an open economy and widening racial, income, and wealth inequality.”

This commitment also means that antitrust enforcers need to recognize that race shapes how markets operate. As this report documents, monopolies have harnessed racism to build and entrench their market power. Recognizing these racialized dynamics can sharpen regulators’ ability to analyze markets and spot monopolization strategies and other competition problems. Race is not merely a social concern best left to other areas of law, as some have suggested; it is highly relevant economically. As this report shows, monopolistic firms have exploited racial hierarchy to amplify their monopsony power in labor markets, raise prices on captive consumers, reduce output by creating food and pharmacy deserts, and block new businesses and innovations that might challenge their grip. These are all competition problems at the center of antitrust.

Second, this vision requires understanding that antimonopoly action includes the full range of economic policy tools in our tool chest — not just applying antitrust but also rewriting our tax code, restructuring financial markets, strengthening labor protections, and reorienting corporate governance. If antitrust is the hub of the wheel of our regulatory policies that can restructure the economy to contain corporate power, the other four tools are the main spokes on that wheel.

Third, antimonopoly should include in its scope the direct repair of and investment in poor communities of color through public options and public goods at all levels of government.