Most of America’s frustration with monopolies gets directed at corporate giants like Facebook and Google. But many industries may be consolidating in a more subtle way.

Smaller mergers that go under regulators’ radar could be playing a big role in concentrating local markets across the country, according to a paper in the June issue of The American Economic Review: Insights.

Author Thomas Wollmann found that when reporting requirements were relaxed, mergers between competitors quickly followed.

Since 1976, US antitrust regulators have relied heavily on a premerger notification program to spot anti-competitive takeovers. In the simplest terms, the program required that the government be notified when a company with assets over $10 million is bought. In 2001, that threshold was increased to $50 million. Other aspects of the law were relaxed as well, but in practice this threshold was the most important.

After the change, notifications and investigations of newly-exempt mergers dropped immediately and dramatically.

Figure 3 Wollmann (2019)