WASHINGTON – President Biden has assembled the most active antitrust team in decades, aligning his administration with three legitimate crusaders as the organization prepares to conduct business consolidation and market power with efforts that may include preventing mergers and breaking up of large companies.
Mr. Biden’s decision last week to appoint Jonathan Kanter to lead the Justice Department’s antitrust division is the latest sign that he is willing to clash with corporate America to promote more competition in the industry. technology and across the economy. Mr. Kanter has spent years as a lawyer fighting giants like Facebook and Google on behalf of rival firms.
If confirmed by the Senate, he will join Lina Khan, who has helped curb academic debate on antitrust and now leads the Federal Trade Commission, and longtime proponent Tim Wu. parted ways with Facebook and other major companies, who is now the president’s special assistant for technology and competition policy.
The appointments highlight both the Democratic Party’s new antitrust activism and the Biden administration’s growing concern that the concentration of power in technology, as well as other industries such as pharmaceuticals, agriculture, health care and finance, has hurt consumers and workers and slowed economic growth.
They also emphasized that Mr. Biden is willing to use his power in office and not wait for tougher congressional action, an approach that is both quicker and potentially more risky. This month, he issued an executive order with 72 initiatives aimed at fostering competition in various industries, increasing scrutiny of mergers and limiting the spread of forced labor. sign non-compete agreements.
Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push. sweeping legislation to give new powers to federal regulators. , especially in the field of technology. The core federal antitrust laws, written more than a century ago, do not envision the kind of commerce that exists today, where large companies can offer customers low but right prices. compete.
The administration has quietly backed legislation through the House, but has yet to seek to lead a congressional antitrust push the way Biden does on infrastructure, childcare and other issues. another component of its $4 trillion economic agenda.
That could be problematic if judges continue to challenge actions by the Justice Department, the FTC or other agencies.
Last month, a federal judge brought a lawsuit against the FTC against Facebook, saying the agency had failed to make a convincing argument that the company was a monopoly and directed it to better justify its statement. Ms. Khan faced her first major test when she reopened that lawsuit and on Friday the agency asked the court for more time.
Mr. Biden’s antitrust picks have argued that Facebook, Google and Amazon have monopolistic power and have used their dominant positions in social media, search and online retail to beat the competition. competition, leaving consumers with fewer choices, even if it doesn’t lead to higher costs.
Companies and some economists disagree. Facebook points to TikTok, Snap, and Twitter as examples of competitors, and Amazon argues they only have 5% of total retail sales in the United States, even though an eMarketer study found that 40% of total retail sales Online retailing takes place on its platform.
The president and his aides have dismissed the “trust” mentality as an important step to rebalancing the economy not only to bring prices down, but to promote more competition and create high-wage jobs. .
“I’ve always thought that the free-market system is not just about competition between companies, but guess what: Companies have to compete for workers,” Biden told a CNN audience in Ohio on Wednesday. Fourth, promote his executive orders. “Guess – maybe they’ll pay more.”
White House officials argue that putting hard-minded regulators in positions of power could allow them to succeed with antitrust efforts in the same way that President Donald J. Trump, who also issued an executive order on competition and talked about breaking up the merger of technology and hospitals, did. Not.
“We are very hopeful,” said Diana Moss, president of the American Antitrust Institute and a proponent of stronger competition enforcement. “But when rubber goes wrong, they will have to launch a positive agenda with the realities of the courts, Congress and outside pressure.”
Some economists warn that Mr Biden’s appointees could move beyond efforts to disrupt the real focus that stifles competition and harms consumers and into industries like restaurants. or grocery store. There, they say, the entry of national players into the local market has in many cases given customers more choice and created more jobs.
Chang-Tai Hsieh, an economist at the University of Chicago, whose research has found that some corporate concentration in recent years has created the innovation that drives the economy. “They are looking at what they see in the tech industry — and the tech industry is different. And they are extrapolating from the tech industry to all the other industries.”
Corporate America has been resisting Biden’s efforts. Google, Facebook and Amazon have filled their legal teams with antitrust experts, hiring veteran government antitrust officials in recent years. Facebook and Amazon have filed petitions asking Ms. Khan to deny antitrust issues involving their companies. They say Ms Khan, who has worked on a House antitrust investigation into digital platforms, has prejudices about their corporations. Critics of Mr. Kanter, a private antitrust attorney, point out that his previous representations to Microsoft and News Corp were a conflict of interest as the Justice Department launched a court battle against Google.
Mr. Biden’s moves reflect the growing influence of the corporate powerhouse movement that has spread from progressive academics and liberal leaders like Senator Elizabeth Warren of Massachusetts to several parties. most conservative Republican in Congress.
Thomas Philippon, an economist at New York University, concluded in 2019 that increased market concentration has hurt the US economy and costs Americans $5,000 a year. Administration officials repeatedly cited that statistic to support Mr. Biden’s recent executive order.
Sticking to market concentration and efforts to promote competition “could make a huge difference in the lives of millions of people in this country,” said Bharat Ramamurti, deputy director of the National Economic Council of India. Biden and a former aide to Warren, said in an interview.
Mr. Ramamurti cited potential benefits not only from breaking up the company, but also from giving consumers more and cheaper options for checking accounts, allowing hearing aids to be sold without a prescription and a limited period of time. restrict the company’s restrictions on whether employees can work for competitors.
The approach is in stark contrast to that of regulators in the Obama administration, when Mr. Biden was vice president.
The number of hospitals merging quadrupled during President Barack Obama’s first term, leaving millions of patients with fewer choices and higher prices for medical care.
In 2011, regulators approved Comcast’s merger with NBCUniversal – which combined a powerful cable and internet provider with a media giant – on terms that the executive vice president of the government approved. the company, David Cohen, dismissed as not “particularly restrictive”.
Only one in three Democrats on the Federal Communications Commission opposes the deal, and Christine Varney, the head of antitrust division at the Justice Department, said the merger would “bring forth great products.” new and innovative products to the market, providing consumers with more program choices.”
In 2016, Tom Vilsack, Mr. Obama’s Secretary of Agriculture, who resumed that role for Mr. Biden, downplayed the harms of agricultural mergers.
“I don’t think just because a few key players will be able to merge or consider some other type of agreement that necessarily in the long term absolutely guarantees that farmers will have less choice,” said Vilsack. said in an interview. with USA Today.
Mr. Biden has directed federal regulators to consider a tougher line against business consolidation in hospitals, health insurance, meat processing and technology, which could include a review. previously approved mergers.
And his antitrust regulators are trying to back down from mergers approved during the Obama years. The Federal Trade Commission’s recent lawsuit aims to circumvent Facebook’s centers on the company’s purchase of Instagram in 2012 and WhatsApp in 2014. The agency did not block the mergers, saying it did not see it. sufficient evidence of harm to consumers and competition.
Those decisions have come back to haunt the FTC. The federal judge who brought the Facebook complaint in June questioned the face and why the commission had waited so long to try to retract those transactions.
Courts have become increasingly conservative in antitrust cases, increasingly respecting the belief that higher prices are the strongest sign of competition infringement.
Administration officials acknowledge that challenge and say they are scrutinizing the antitrust views of potential judicial candidates, in the hope that it can give the court a more favorable view of the case. government efforts to prevent mergers and break up monopolies.