There's some sort of paradox at work here, and it's not clear where it is breaking down.

Current interpretation of antitrust law in the US is very pro-consumer, which is a horrific problem, because it's supposed to be anti-concentration-of-power. That is to say, selling at a loss to drive down prices and then raising them once you've put your competitors out of business is only illegal in the last step -- the undercutting is not an issue. It should be -- the very act of anti-competitive behavior, like driving out competition or putting up barriers to competition in the form of uneconomic pricing, is written right into the text of the laws. But consumers are helped by low prices, and once the competitors are gone, who is going to say whether the prices are better or worse than they should be; there's no benchmark.

The main problem with this viewpoint in my mind is that this is clearly unworkable -- a continuous pump-and-dump can't work; eventually it has to come crashing down. Arguably it is now crashing down, so that's fair, but historically we still have things like Amazon in the digital world, not to mention the traditional big-box retailers that have driven out anything resembling competition.

So do we need to have a working anti-trust regime in order to counteract this? Or will such monopolies naturally fail if they are exposed to external stresses? In some ways that depends on the theory of why we are seeing this happen; why there hasn't been a huge undercutting of these companies. Or maybe the problem is just that we're looking at the wrong timescale; and given long enough these will collapse under the weight of new entrants in to their markets.

One theory is that regulatory capture is the root of it; that once you have established your market position by burning money, you can then start spending money on codifying your business practices as the required standard for all competitors. Regulators like to deal with fewer entities rather than more, so the hobgoblin of a foolish consistency start to overwhelm more common-sense ideas in the space.

Another is that the power dynamics shift and allow you to treat government as your protector; on the state and local level looking for special treatment (tax advantages, preferential zoning), at the federal level sometimes even direct protection or pork barrel spending or even just being able to influence tax policy.

Another theory is that once you are large enough, the various tax and money-moving games that aren't worth it for small companies start to scale up; it costs you a million to legally hide or disguise your profits, so until you are looking at revenues at that scale you're screwed, so getting over the next size hurdle is the only thing you can focus on.

Some might say that this is just a consequence of corporate person-hood and limitation of liability; that in the desire to ensure that corporations pay taxes, we accidentally tacked on too much power by treating them as entities rather than collectives, and all such entities are intrinsically psycopathic.

The last theory, and the one that I most dislike (though it may well be true) is that this is just where capitalism ends up if you allow it to grow unfettered; r > g, and all that jazz.

I don't find any of these 100% convincing, though.