You don’t have to read the business pages to know that recent decades have resulted in massive corporate consolidation. Whether it’s air travel, wireless service, internet, banking, or eyeglasses, a number of industries have enjoyed such merger mania that only a few national competitors remain.
Mergers aren’t typical fodder for comedy, but Last Week Tonight‘s John Oliver gave it a go on Sunday, and even did a bit of biting the heavily consolidated hand that feeds him by blasting the upcoming merger of AT&T and HBO parent company Time Warner.
The entire segment is available online, and we recommend you watch it. But without further ado, here are five funny things you should know about corporate consolidation.
1. “F*$k You AT&T”
As we’re all well aware, AT&T is at this very moment attempting to buy Time Warner. Time Warner happens to be the company behind HBO — John Oliver’s home.
Oliver didn’t let this small detail deter from making a point about the ridiculously consolidated market, though.
Instead, he took the time to point out that AT&T is “the top telecom company around alphabetically, and nothing else.”
He also didn’t seem too worried that his future “stepfather” would catch the segment, noting that his story could be a little dangerous for the show but that was “presuming that AT&T executives manage to get their shitty service working long enough to see it.”
2. The Golden Age Of Small Business
Oliver laments on the fact that many politicians and consumers firmly believe that small dollar businesses have a special place in America’s heart.
And they often do. But simply referring to these small businesses as the backbone of the country doesn’t do anything.
In fact, Oliver notes that the rate at which new businesses are created has fallen since the 1970s, all while big businesses continue to get bigger.
2. Ridiculously Consolidated
If you’ve ever traveled by air, rented a car, or subscribed to cable, then you know there really aren’t that many options to meet your needs.
“All this merger activity has helped make some sections of our economy ridiculously consolidated,” Oliver said.
For instance, there are just four major airlines — Delta, United, Southwest, and American. Oliver points out that JetBlue isn’t included because it’s “just a very expensive way to eat blue chips.”
American Airlines is now composed of TWA, American West, and US Airways; Southwest bought AirTran; United and Continental got married; and Delta bought Northwest Airlines.
As for car rentals, three companies — Avis, Hertz, and Enterprise — control 90% of business in the U.S. And don’t even get started on beer. After the $107 billion dollar merger last year between AB InBev and SABMiller, there are just two major beer players in the U.S. — AB InBev and Molson Coors.
Oliver also takes time to point out that online search engines aren’t immune to little competition.
“Online search engines, are as we all know, dominated by one player,” he says. “That’s right, say it with me, Bing. That’s right ‘Bing, the best way to Google something.”
4. Blowing Up Your Cable Box… Literally
While the U.S. has several regulatory bodies that are supposed to ensure competition is fair and there are no monopolies in operation, they still happen.
But they aren’t monopolies, they’re “oligarchies” in which several companies control an entire industry and live peacefully among each other without worrying about price competition, Oliver notes. Another drawback from such consolidation and peaceful operation between companies, is a lack of innovation.
“Heavily consolidated industries can lose the incentive to innovate,” Oliver says, pointing to everyone’s favorite home appliance, the set-top cable box.
“If you have one of those, you probably hate it, because it’s huge, it’s glitchy,” Oliver notes. “And it may be one of the largest energy consuming items in your house even when it’s turned off.”
“But if you think about it, cable companies have no real incentive to improve them, they are essentially regional monopolies,” he says.
To make matters worse, “you can’t even smash your cable box out of frustration, because you are renting it and they will charge you hundreds of dollars if you don’t give it back.”
That’s why Oliver did everyone a solid and blew one up… in slow motion.
5. Grow A Backbone
To close the segment, Oliver points out a few other industries that offer customers few, if any options: caskets, banks, insurance, and the afterlife.
“The point is,” he said. “We have laws to prevent the worst effects of consolidation, it might be time to actual use them.”
To that end, he suggested the politicians who champion small businesses as the backbone of America, “stop talking about backbones and actually f***ing grow one.”