CORPORATE CONCENTRATION NOT LIMITED TO TECH

dard formula that antitrust regulators and others use to analyze proposed corporate mergers, according to a paper written by Michaely, along with Gustavo Grullon of Rice University and Yelena Larkin of York University in Toronto.

A consensus has formed among economists that the trend toward corporate concentration — in terms of the size of companies and their grasp on profits — is real and may be long-lasting. “The number of papers that are being written on this from week to week is remarkable,” said David Autor, a Massachusetts Institute of Technology economics professor who has studied the phenomenon.

The consolidation is especially pronounced in the technology sector, where a group of large, efficient companies now lord over the fastest-growing and most dynamic parts of the U.S. economy.

When the iPhone was introduced in 2007, it quickly transformed the way society interacts with technology. More than 1.4 billion have been sold since.

Apple and Google combined now provide the software for 99 percent of all smartphones. Facebook and Google take 59 cents of every dollar spent on online advertising in the United States. Amazon exerts utter dominance over online shopping and is getting bigger, fast, in areas like streaming of music and videos.

But the trend is not confined to technology.

Today, almost half of all the assets in the U.S. financial system are controlled by five banks. In the late 1990s, the top five banks controlled a little more than one-fifth of the market. During the past decade, six of the largest U.S. airlines merged into three. Four companies now control 98 percent of the American wireless market, and that number could fall to three if T-Mobile and Sprint are allowed to merge.

Consolidation begets profits. “Whoever is left is more profitable and can generate higher returns to investors,” said Larkin, who has studied the effect of corporate consolidation on financial markets.

And in the labor market, scholars have linked corporate consolidation to rising income inequality and the declining share of the nation’s wealth that goes to workers. The so-called labor share of the economy has been declining in the United States and other rich countries since the 1990s, coinciding with the trend toward corporate concentration. And that decline has been most pronounced in industries undergoing the greatest consolidation.

Economists disagree about cause and effect. Some say that companies like Apple, Amazon and Google spent lavishly to establish their dominant market positions, and can now make enormous profits without spending much, as a share of their income, on labor.

Other economists argue that with fewer companies in a given industry, there is simply less competition for workers and therefore little pressure to give raises to workers. That may be especially true in industries where skills are highly specialized, because it is harder for workers to look elsewhere for better pay. Recent research has highlighted examples of companies colluding to keep wages low by agreeing not to poach each other’s workers and by inserting provisions into workers’ contracts that bar them from joining competitors.

Some on the left take the critique a step further, arguing that greater corporate power translates into weaker antitrust enforcement, looser limits on campaign contributions and declining rates of unionization, which collectively make it easier for big companies to tilt the economy in their favor. Companies, in this view, are not just reaping bigger profits than they were in the past, but they are also feeling less pressure to share the spoils with workers.

Although companies tend to gain power as they grow, that does not make them invincible. They can simultaneously become more susceptible to crippling assaults from politicians and regulators. That is especially true at a time when populism has gained currency on both the left and right.

The same tech companies that are vacuuming up a greater share of corporate profits are also in the cross hairs of governments around the world.

Google was recently fined $5 billion by European antitrust regulators who accused the search giant of abusing its market position by forcing mobile phone companies to install Google apps on their phones.

Facebook is being forced by angry politicians and regulators to do more to safeguard users’ data and to prevent its platform from being used to interfere with U.S. elections. Last week, Facebook reported that its growth was slowing and it was increasing spending on privacy and security. Its shares plunged 19 percent, lopping roughly $120 billion of the company’s market value in a single day.

And President Donald Trump has repeatedly taken aim at Jeff Bezos, Amazon’s chief executive. Trump — who has expressed anger about coverage of his administration in The Washington Post, which Bezos bought in 2013 — has accused Amazon of not paying enough taxes and of taking advantage of the U.S. Postal Service. If Trump’s rhetoric translates into policy changes, it could hit Amazon’s bottom line.

Apple’s quarterly profit set the stage for its market value to top $1 trillion. But executives issued a cautionary note: The trade war with China — where Apple generates about 18 percent of its revenue — threatens the company’s ability to rake in profits at its current clip.

“A year ago, the big tech companies were basically untouchable,” said Luigi Zingales, a finance professor at the University of Chicago who has studied government regulation and corporate behavior. “Today, they seem not to be.”