Biden’s antitrust team signals a big swing in corporate titans

WASHINGTON — President Biden has assembled the most aggressive antitrust team in decades, piling up his administration with three legal criminals as it prepares to take on corporate consolidation and market power with efforts in which mergers can be thwarted. Stopping and breaking up large companies can be involved.

Mr. Biden’s decision to make this past week Name Jonathan Contero To lead the Justice Department’s antitrust division is the latest sign of his willingness to contend with Corporate America to foster more competition in the tech industry and economy. Mr. Kantar has spent years as an advocate fighting giants like Facebook and Google on behalf of rival companies.

If confirmed by the Senate, he will be joined by Lina Khan, who helped Redefine academic debate on antitrust and now leads the Federal Trade Commission, and Tim Wu, a Longtime proponent of breaking up Facebook and other large companies that are now Special Assistants to the President for Technology and Competition Policy.

The appointments reflect both the Democratic Party’s renewed 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 affected economic development.

They also underline that Mr Biden is prepared to use the power of his office and not wait for the hard grinding of Congress to act, an approach that is both swift and potentially risky. this month, he issued an executive order Filled with 72 initiatives to promote competition across different industries, increase merger checks, and ban the widespread practice of forcing workers to sign non-negotiable agreements.

Outside groups and the administration’s ideological allies have warned that if Mr Biden is in fact his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for comprehensive legislation to give federal regulators new powers. Especially in the technical field. core federal antitrust laws, written more than a century ago, didn’t imagine The kind of commerce that exists today is where larger companies can offer customers a lower price at the expense of competition.

The administration has quietly backed the legislation working through the House, but it has not yet sought to advance Congress’s distrust of Mr. Biden’s infrastructure, child care and other components of his $4 trillion economic agenda. Is.

This could prove problematic if judges continue to take action by the Justice Department, the FTC or other agencies.

Last month, a federal judge dismissed an FTC lawsuit against Facebook, saying the agency had made no persuasive argument that the company is a monopoly and directing it to better justify its claims. . Ms Khan faces her first major test on re-filing that lawsuit, and on Friday the agency asked the court for more time.

Mr Biden’s no-confidence motion has argued that Facebook, Google and Amazon have monopolistic power and have used their dominant positions in social media, search and online retail to crush competitors, giving consumers fewer choices. , even if it does not result in a higher cost. .

Companies and some economists disagree. Facebook points to TikTok, Snap and Twitter as examples of competitors, and Amazon argues that it accounts for only 5 percent of its total retail sales. In the United States, despite an eMarketer research study showing that 40 percent of all online retail sales take place on its platform.

The president and his allies have embraced the “trustbuster” mindset as an important step toward rebalancing the economy not only to lower prices but also to foster more competition and create higher-paying jobs. .

“I’ve always thought that the free-market system is not only competition between companies but guesswork: companies must compete for workers,” Biden said while promoting his executive order to a CNN audience in Ohio on Wednesday. Said. “Guess what – maybe they’ll pay more.”

White House officials argue that putting tough-minded regulators in powerful positions could allow them to succeed with antitrust efforts in a way President Donald J. Trump, who issued an executive order on competition and talked about scrapping the tech and hospital merger, did not.

“We are hopeful,” said Diana Moss, president of the American Antitrust Institute and a proponent of stronger competition enforcement. “But when rubber meets the road, they must combine an aggressive agenda with the realities of the courts, pressure from Congress and outside.”

Some economists have warned that Mr Biden’s appointment could lead to further efforts to break the concentration that actually stifles competition and harms consumers and those in industries such as restaurants or grocery stores. There, he says, the entry of national players into local markets has in many cases given customers more options and created more jobs.

“I am most concerned about rhetoric,” said Chang-Tai Hsieh, an economist at the University of Chicago. whose research has found That some corporate concentration in recent years has produced economy-boosting innovation. “They’re seeing what they’re seeing in the tech industry — and the tech industry is different. And they’re extrapolating from the tech industry to all the other industries.”

Corporate America is already fighting Mr Biden’s efforts. Google, Facebook and Amazon has filled its legal teams with antitrust experts, hiring experienced government antitrust officials in recent years. Facebook and Amazon have petitioned to separate Ms Khan from antitrust cases related to their companies. They say Ms Khan, who worked on a House antitrust investigation of digital platforms, comes with prejudices about her corporations. Critics of Mr Kanter, a private antitrust lawyer, point to his past representations of Microsoft and News Corp as a conflict of interest as the Justice Department battles the court battle against Google.

Mr. Biden’s move reflects the growing influence of a movement to control corporate power that has spread from progressive scholars and liberal leaders such as Senator Elizabeth Warren of Massachusetts to some of the most conservative Republicans in Congress.

Thomas Philippon, economist at New York University, completed in 2019 that rising market concentration has hurt the US economy and paid the price of the typical American $5,000 per year. Administration officials repeatedly cite that figure to support Mr Biden’s recent executive order.

Bharat Ramamurthy, deputy director of Biden’s National Economic Council and a former aide to Ms Warren, said working to crack down on market concentration and boost competition “could make a huge difference in the lives of millions of people in this country.” ” Said in an interview.

Mr Ramamurthy cited potential benefits not only from breaking up companies, but from helping give consumers more and cheaper options for checking accounts, allowing hearing aids to be sold without a prescription, and company restrictions. Limited whether employees can work for a competitor.

This approach contrasts with the approach of regulators during the Obama administration, when Biden was vice president.

The number of merged hospitals quadrupled during President Barack Obama’s first term, leaving millions of patients with fewer options and higher prices for medical care.

In 2011, regulators approved Comcast’s merger with NBCUniversal — a combination of a powerful cable and Internet provider with a media giant — with a condition that the company’s own executive vice president David Cohen rejected. Not “particularly restrictive.”

Only one of three Democrats on the Federal Communications Commission opposed the deal, and Christine Varney, the head of antitrust at the Justice Department, said the merger would “bring new and innovative products to market, providing consumers with more programming options.”

In 2016, Mr. Obama’s Secretary of Agriculture, Tom Vilsack, who reprized that role for Mr. Biden, downplayed the pitfalls of an agricultural merger.

“I don’t think that just because some of the major players are potentially going to merge or consider some other sort of arrangement that essentially guarantees long-term that farmers will have less choice,” Mr. Vilsack Said In an interview with USA Today.

Mr Biden has directed federal regulators to consider a hard line against corporate consolidation in hospitals, health insurance, meat processing and tech, which could include revisiting previous mergers that were approved.

And their antitrust regulators are trying to open the merger approved during the Obama years. The Federal Trade Commission most recently sued Facebook centers on the company’s purchase of Instagram in 2012 and WhatsApp in 2014. The agency did not block the merger, saying it did not find sufficient evidence to harm consumers and competition.

Those decisions have come back to haunt the FTC. The federal judge, who dismissed his Facebook complaint in June, faces questions about why and why the commission waited so long to try to open those deals.

Courts have become increasingly conservative in antitrust cases, adhering more strongly to the belief that high prices are the strongest indication of a breach of competition.

Administration officials accept that challenge and say they are investigating antitrust views of potential judicial nominees in hopes of swaying courts toward a more sympathetic view of government efforts to prevent mergers and break up monopolies.

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