Introduction

What Are Superstars?

Concerns About Superstars

Academic Papers Attributing Size to Market Power

Superstars Result From Superior Performance

Why More Superstars Now?

How Should Policy Respond?

Conclusion

About This Series

Endnotes

Introduction

Over the past few decades, many Firms have gained market share in their industries, so much so that they have been coined “superstar” firms. This phenomenon has been especially true in digital markets wherein the nation’s largest Internet firms have created platforms fueling rapid growth, but it has occurred across many industries.

Some economists, advocates, and policymakers, especially those embracing the “neo-Brandeisian” approach to antitrust policy, have expressed alarm at this trend. They allege that the firms’ growing market share is largely due to anticompetitive conduct, rather than inherently superior business performance. They argue that this market power in turn has allowed firms to raise margins and profits, cut spending on innovation, and unfairly preempt competitive challenges. Even when firms have grown due to superior performance, these advocates warn that the firms often preserve their advantage by adopting a variety of anticompetitive practices.