Vox: How big business exploits small business

June 30, 2021 Media

Major corporations really want you to know how much they care about small businesses — as long as those small businesses don’t compete with them or cause them too much trouble.

During the pandemic, big companies were sure to draw attention to the ways they were supporting the little guy. Facebook highlighted all sorts of ways it says it helps small business and warned that regulations for the social media giant would actually come at a cost to the little guy. Uber, likewise, emphasized its help to restaurants. And now that the economy is rebounding, powerful business interests say they’re still looking out for the up-and-comers on issues such as wages, unemployment, and regulation, a common talking point being that any changes might put smaller operations at a competitive disadvantage.

What can get lost in this is that small businesses already are at a competitive disadvantage, often because of the bigger players that purport to support them. Large corporations are happy to invoke small business when convenient, especially when it helps them keep power. It’s essentially reputational laundering. But what can be less obvious is that these same entities are constantly finding new ways to stunt small-business growth to keep new entrants and potential competitors at bay. They also create roadblocks and find ways to extract money and power from small businesses in order to maintain their positions and increase profits.

“If you’re a growth-oriented business right now, the pathway seems to be that you either become a monopoly or you get acquired by one,” said Nidhi Hegde, director of strategy and programs at the American Economic Liberties Project.

Some consolidation within industries is a natural part of maturing, but the process has sped up in recent years. An increasing number of industries — from airlines to beer to hospitals — are controlled by just a handful of players. We often focus on what this means for consumers, and antitrust law generally looks at what consolidation or monopolization means for prices. But what sometimes gets lost in the conversation is what it means for the other companies trying to get a foot in the door or survive.

“All entrepreneurs and businesses should have access to markets to launch and grow new businesses, but today — and the way markets are structured — dominant corporations are a major barrier,” Hegde said. “And that is one of the reasons we’re seeing entrepreneurship and small business growth declining.”

Hegde is one of the people behind Access to Markets, a new initiative out of Economic Liberties that seeks to examine the effects of what they call the “rise of private gatekeepers.” They outlined the tactics used to undermine small businesses and keep away competitors in a recent report. “It’s not just the big corporations and Big Tech. We see this across the economy,” Hegde said.