Besides the issue of corporate ownership / concentration, index funds are also increasing the risk of a market crash. One of the selling points for index funds is that they supposedly offer great diversification and this might be true in normal times but in a financial panic people will pull out of index funds and drive correlations to 1. E.g. if there's a crash in health care, panicked investors won't just be pulling out of health care they'll be pulling out of the market as a whole.