The moment you book a flight to Bora Bora, pay your annual phone bill, or simply walk into your local grocery store, you are participating in the growing economic trend of duopoly. From Delta and United to Coke and Pepsi, there is a clear rise of two major players in the game of American industries.
According to the U.S. Bureau of Labor Statistics, market concentration skyrocketed across various sectors over the past two decades, with the top two firms in each industry claiming more than half of the total revenue. Economists conclude the main factors of this incline to the following: heavy fixed costs, high barriers to entry, and economies of scale that tailor to large incumbents. This rising trend ultimately poses the question of whether duopoly helps Americans or adversely impacts our lives, quietly making it more expensive and unsustainable?
Airlines are quintessential examples that feed into duopoly. After a wave of mergers in the 2010s, the four largest airlines consolidated control of approximately 80% of the U.S. market. Moreover, the dominant airlines—Delta and United—determine major routes and business travel corridors. According to the Government Accountability Office, reduced competition has contributed to higher fares, more fees, and fewer flight options in many regions. When essentially only two major carriers serve a route, neither firm has much incentive to undercut the other.
Telecommunications reflect an aligning pattern. AT&T and Verizon hold 70% of the wireless market together and raised prices multiple times in the past two years, based on Statista. Given that the creation of a nationwide network requires billions of investments in infrastructure, new entrants rarely stand a chance. Thus, even T-Mobile’s rise was merely possible after its merger with Sprint which is another sign that consolidation is the only reasonable path to scale.
Beyond this, Duopoly also impacts our country regarding consumer goods. Coke and Pepsi do not just dominate the food industry with their sodas; they own dozens of beverage brands that fill entire aisles. According to The Wall Street Journal, both companies exclusively sign contracts with restaurants, stadiums, and schools which make it nearly impossible for smaller competitors to gain shelf space or even fountain space.
Defenders of duopolies argue that economies of scale lower costs and keep industries efficient. The act of running a global airline or telecom network is very costly indeed but efficiency for firms does not automatically translate to savings for consumers. According to a 2023 study from the Federal Trade Commission, concentrated markets tend to see “parallel pricing behavior,” which means that companies raise prices in lockstep without formally colluding. Simply, duopolies do not need to break the law in order to break competition in our economy.
When two firms set the tone for an entire industry, consumers end up with fewer choices, higher prices, and ultimately results in slower innovation. The economy may look efficient on the surface, but efficiency isn’t the same as equality.
If we collectively seek for a marketplace with a more competitive nature, we must stop treating duopolies as an inevitability. It is a choice that is made slowly from industry to industry. Just like any other economic trend, it can be challenged but only from the effort of recognizing it and changing the trajectory in a unified manner.
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