STUDY: MARKET CONSOLIDATION IN MAJOR INDUSTRIES LEADS TO INCREASED LOBBYING: As corporations in three major industries consolidated market power over the last 20 years, that corporate concentration closely aligned with a later surge in lobbying expenditures from those industries, according to a new study out today.

— The research, from the anti-monopoly American Economic Liberties Project, examined market concentration in the tech and internet, oil and gas and pharmaceuticals industries using the Herfindahl–Hirschman Index, and compared them with spending on lobbying. While it took several years for a correlation to show up in some cases, the study’s author Reed Showalter concluded, albeit tentatively, “that monopolies seek to acquire political power, whereas competitive businesses focus on competing with each other instead of dominating public rule-making bodies.”

— Though conventional wisdom might indicate that as corporations look to consolidate, that might be reflected in pre-merger lobbying increases, Showalter found that mergers actually predicted increased lobbying in the case studies he performed. Put another way: “It is not that firms lobby to get big, it is that they get big and then expand lobbying,” he wrote.

— For instance when examining a set of internet-based companies including but not limited to Google, Facebook and Amazon — all some of Washington’s biggest lobbying spenders — the industry’s Herfindahl–Hirschman Index value, a common measure of market concentration, accounted for around 43 percent of the variation in lobbying expenditures by those companies four years later. The trend was even more pronounced among pharma companies. “When pharmaceutical companies gained market power, they lobbied more, and when they lost market power, they lobbied less,” Showalter wrote.

— There’s reason to believe there are like minds in the Biden administration working on this issue: Showalter acknowledged the help of former Columbia Law professor Tim Wu for “engaging deeply to help shape this report in its early forms.” Wu is now an antitrust adviser on the National Economic Council. And Showalter works at the antitrust law firm founded by Jonathan Kanter, President Joe Biden’s pick to lead the Justice Department’s antitrust division.