Save for the rare instances where high start-up costs or other extreme barriers to entry are present or the potential customer base is extremely limited, most economists agree: Monopolies are bad for consumers.

This thinking, now more than a century old, gave rise to the adoption of increasingly more comprehensive laws giving the federal government the power, as it was called in the days of Teddy Roosevelt to “bust the trusts.”

The rise of new and powerful technology companies with tremendous market caps has some modern-day progressives and supposed free marketeers who should know better looking to rewrite the nation’s antitrust laws once again. This time they want to break up companies not based on whether they allow for competition or impede consumer choice—but simply because of their size and reach.

This new focus is harmful to consumers. Attempts by Congress to regulate Big Tech—which will inevitably spread to other sectors of the economy if their efforts become law—and the Federal Trade Commission’s focus on trying to block hospital mergers presume without evidence that size alone is a problem while ignoring the benefits of increased productivity and efficiency that can often be achieved through market consolidation.

At the same time, this focus on new ways and reasons to regulate the marketplace often allows what should be obvious abuses of the existing rules to be ignored. In some cases, yes, consolidation is harmful, especially when a single entity chooses to buy up its potential competitors to monopolize the market for the service it provides.

A company created in 1994, The Work Number, helps firms in the financial sector verify the employment and wages of potential home buyers. Most Americans have probably never heard of it, but many of the nation’s largest corporations,  including Home Depot and General Electric, are among its customers. Through it, they share employee data with mortgage companies to help ensure the people seeking to borrow money to buy a home are a good risk.

It deserves renewed scrutiny, even as legislators push for a new antitrust regime because, despite earlier lawsuits and investigations, it has a near-monopoly on this type of employment data product. In the early 2000s, the Federal Trade Commission (FTC) sought to highlight this lack of competition with its decision to challenge TALX (The Work Number’s parent company) in its acquisitions of James E. Frick, Inc and Gates McDonald & Company, a Nationwide Mutual Insurance Company subsidiary.

These two companies, though largely unknown to consumers, helped TALX increase its market power in the outsourced unemployment compensation management (UCM) and verification of income and employment services (VOIE). Unemployment compensation management consists of administering, on behalf of large, multi-state employers, unemployment compensation claims filed with a state or territory. VOIE services consist of providing income and employment information on behalf of employers to third parties, such as lending institutions.

TALX continued to accumulate market power, purchasing leading corporations with assets in the UCM and VOIE industries. The FTC alleged that these acquisitions (and others during this period) substantially reduced competition for UCM and VOIE services, potentially violating both the Clayton and FTC Acts. Jeffrey Schmidt, the FTC’s director of the Bureau of Competition at the time stated that “TALX Acted Illegally by acquiring virtually all of its competition in a series of transactions.”

With so many on both the left and right expressing concern about the dangers of consolidation and market power, TALX (now owned by Equifax) deserves another look, especially now that The Work Number has been found to have raised the price it charges for the vital service it provides by 31% over the past year. There’s little the mortgage companies can do about this except to pass the increased cost along to consumers, which creates more challenges for first-time homebuyers in an increasingly bizarre market.

The Work Number has acquired a virtual monopoly on the services it provides by buying up its competitors. That’s what should worry the feds: How the company’s anticompetitive acquisitions are driving up prices to the detriment of those who must use their employee verification services.

Instead, at least in the Biden Administration, they are focused on gaining power and leverage over the companies that are helping to lead the recovery and rebuild the economy following the pandemic lockdowns.

Rather than create new issues for regulators to consider, Congress would be better to insist consumer welfare be protected through the enforcement of the rules already on the books.

Originally published at on May 13, 2022.

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