system
Given the following post, respond as if you're commenting on Reddit:
human
Is there an overall advantage to consumers to having large corporations?

My specific question isn’t about size per se, but how many “things” a company does.  For instance, Amazon is a marketplace, but they also produce their own products and services.  This obviously benefits the company, and potentially lowers the cost to the consumer but it also gives the company huge power over the consumer and the industry (barriers to entry, etc).  I feel like huge firms might stifle innovation among other things.  Is there a way to quantify that?  Should companies be forced to spin off into separate entities?  Would it potentially help the companies as well?
gpt
That's called vertical integration, and it's generally considered a good thing for consumers. The main reason is that it's not actually anti-competitive in itself. For example if Company A had Company B as a supplier, and both had 10% market share in their respective fields, then if Company A acquired Company B, it would still only have 10% market share. However if it acquired it's competitor Company C also with 10% market share, it would have 20% market share, and could begin to threaten the entire industry. So the vertical integration is generally considered better, and tends to lead to lower prices without hurting consumers as much.

The problem starts to manifest if Company A has 75% market share and acquires a supplier Company B with 10% market share. It can then force its users to effectively only buy Company B products, and can develop monopolies on both sides. That's a separate issue though.