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For generations, achieving the American dream and starting a business have gone hand in hand. Millions of Americans have utilized entrepreneurship to support their communities and create better lives for their families.

Business owners may start small, but the goal is almost always to grow the enterprise, reach more customers, and hire more employees. As these firms evolve, they build up the American economy and produce numerous benefits for our society.

These entrepreneurs are the bedrock of our economy, accounting for nearly 99 percent of all private-sector employers and generating roughly two-thirds of all new jobs. However, too often, we take our entrepreneurial ecosystem for granted.

The ability of entrepreneurs to start and grow a business is predicated on the existence of a level playing field between large corporations and their small peers. Competition is the precondition that allows small businesses to thrive.

In fact, this idea of competition underpins the entire American economy. More competition leads to lower prices, higher quality goods and services, greater variety, and innovation that moves our country forward.

Unfortunately, longstanding trends indicate that our economy is becoming less competitive. Today, in over 75% of industries, there is more corporate concentration, which has given large companies more market power than they had 20 years ago. From high-tech startups to family farms, small firms across nearly every industry are struggling under the weight of outsized corporate power. 

As consolidation has increased, small business creation has suffered. Aside from the uptick in new business registrations from 2020 and 2021, the share of small firms entering the market had been declining since the early 1980s. In 1982, new firms constituted 38 percent of all businesses but that fell to only 29 percent in 2018.

The pandemic ignited a wave of small business creation, with new business applications reaching record highs in 2021. This is encouraging, but at the same time, we must ask if these businesses have a fair opportunity to develop without being crushed by their corporate competitors.

The federal government has a long tradition of creating rules and regulations to minimize anti-competitive behavior dating back to the 1800s. One of the primary means of protecting competition is enforcing antitrust laws. These laws help establish the free market rules, seeking to root out anti-competitive practices, like mergers and acquisitions.

However, antitrust laws are just one tool at the government’s disposal. Enforcement of intellectual property, labor, and consumer protection laws are also critical to rooting out anti-competitive practices. So today, I want to survey the current competitive landscape and discuss what is needed to ensure a level playing field for small businesses and entrepreneurs.

When small businesses have a chance to compete, they can achieve great things and provide tremendous benefits for our country. And that’s why it’s important to assess the current environment to see how larger businesses are in some cases helping to facilitate market competition and in others tipping the scales against it.

The Biden administration understands this dynamic. Last July, the President issued an executive order directing government agencies to examine ways to increase competition to benefit consumers, workers, farmers, and small businesses. The order also established a White House Competition Council to monitor the rising power of large corporations in the economy.

I hope that this hearing allows us to build off these actions and discuss more ways we can ensure a handful of dominant players aren’t stifling the growth of small businesses.