Why the Big Will Get Bigger

As the crisis lifts, weaker players will likely fall victim to a consolidation wave

- By David McLaughlin, with Ellen Huet and Jen Skerritt

After weeks of virtual lockdown, America is eager to reopen its economy. But it won’t be a return to business as usual for at least one simple reason: The largest companies are likely to emerge from the crisis bigger and more powerful than ever. Midsize outfits, meanwhile, are running on fumes. Brick-and-mortar stores are struggling to get financing just to make it to the next month. And startups—the building blocks of a competitive economy—are disappearing.

It all adds up to a sobering challenge for U.S. antitrust enforcers. The pandemic risks worsening the very problems of rising concentration and declining competition that they’d already been trying to address before the outbreak.

For almost a year the Justice Department, the Federal Trade Commission, and state attorneys general have been investigating Alphabet Inc.’s Google and Facebook Inc. for possible antitrust infractions. Antitrust officials claimed those inquiries were hardly slowed down by the outbreak as they shifted to working remotely. But as the economy reopens, enforcers may find themselves under pressure not to undertake actions that could hurt jobs.

The pandemic is playing to the strengths of the biggest digital players, as seen in their earnings results for the quarter ended in March. Amazon .com Inc. has gone on a hiring spree to keep up with a surge in demand from millions of homebound consumers. In what’s normally a slow quarter, sales jumped 6%, to a record $75.5 billion.