Mr. Biden’s decision this past week to name Jonathan Kanter to lead the Justice Department’s antitrust division is the latest sign of his willingness to clash with corporate America to promote more competition in the tech industry and across the economy. Mr. Kanter has spent years as a lawyer fighting behemoths like Facebook and Google on behalf of rival companies.
If confirmed by the Senate, he will join Lina Khan, who helped reframe the academic debate over antitrust and now leads the Federal Trade Commission, and Tim Wu, a longtime proponent of breaking up Facebook and other large companies who is now the special assistant to the president for technology and competition policy.
The appointments show 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 like pharmaceuticals, agriculture, health care and finance, has hurt consumers and workers and stunted economic growth.
They also underscore that Mr. Biden is willing to use the power of his office and not wait for the tougher grind of congressional action, an approach that is both faster and potentially riskier. This month, he issued an executive order stuffed with 72 initiatives meant to stoke competition in a variety of industries, increase scrutiny of mergers and restrict the widespread practice of forcing workers to sign noncompete 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 for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.
The administration has quietly supported legislation working its way through the House, but it has not yet sought to lead a congressional antitrust push in the way Mr. Biden has on infrastructure, child care and other components of his $4 trillion economic agenda.
That could prove problematic if judges continue to strike down actions by the Justice Department, the F.T.C. or other agencies.
Last month, a federal judge threw out an F.T.C. suit against Facebook, saying the agency had not made a persuasive argument that the company is a monopoly and directing it to better justify its claims. Ms. Khan faces her first big test when she refiles 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 monopoly power and have used their dominant positions in social media, search and online retail to squash competitors, leaving consumers with fewer options, even if that doesn’t result in higher costs.
The companies and some economists disagree. Facebook points to TikTok, Snap and Twitter as examples of competitors, and Amazon argues it has just 5 percent of all retail sales in the United States, despite an eMarketer research study showing that 40 percent of all online retail sales occur on its platform.
The president and his aides have cast his embrace of a “trustbuster” mentality as a crucial step toward rebalancing the economy not only to drive down prices but to fuel more competition and create high-paying jobs.
“I always thought the free-market system was not only that there’s competition among companies but guess what: Companies should have to compete for workers,” Mr. Biden told a CNN audience in Ohio on Wednesday, promoting his executive order. “Guess what — maybe they’ll pay more money.”
White House officials argue that putting tough-minded regulators in powerful positions can allow them to succeed with antitrust efforts in a way that President Donald J. Trump, who also issued an executive order on competition and talked of breaking up tech and hospital mergers, did not.
“We are hopeful,” said Diana Moss, president of the American Antitrust Institute and a proponent of stronger competition enforcement. “But when the rubber meets the road, they are going to have to juggle an aggressive agenda with the realities of courts, Congress and pressure from the outside.”
July 23, 2021, 5:42 p.m. ET
Some economists warn that Mr. Biden’s appointees could move beyond efforts to break up concentration that truly stifles competition and hurts consumers and into industries like restaurants or grocery stores. There, they say, the entrance of national players into local markets has in many cases given customers more options and created more jobs.
“I’m most worried about the 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 looking at what they’re seeing in the tech industry — and the tech industry’s different. And they’re extrapolating from the tech industry to all other industries.”
Corporate America is already fighting Mr. 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 petitioned for Ms. Khan’s recusal from antitrust matters related to their companies. They say Ms. Khan, who worked on a House antitrust investigation of digital platforms, comes with prejudgments about their corporations. Critics of Mr. Kanter, a private antitrust lawyer, point to his past representation of Microsoft and News Corp as conflicts of interest as the Justice Department wages its court battle against Google.
Mr. Biden’s moves reflect the growing influence of a movement to restrain corporate power that has spread from progressive scholars and liberal leaders like Senator Elizabeth Warren of Massachusetts to some of the most conservative Republicans in Congress.
Thomas Philippon, an economist at New York University, concluded in 2019 that rising market concentration had hurt the U.S. economy and cost the typical American $5,000 a year. Administration officials repeatedly cite that statistic to support Mr. Biden’s recent executive order.
Cracking down on market concentration and working to promote competition “can make an enormous difference in the lives of millions of people in this country,” Bharat Ramamurti, a deputy director of Mr. Biden’s National Economic Council and a former aide to Ms. Warren, said in an interview.
Mr. Ramamurti cited potential benefits not just from breaking up companies but from helping consumers have more and cheaper choices for checking accounts, allowing hearing aids to be sold without a prescription and limiting company restrictions on whether employees can work for a competitor.
The approach contrasts sharply with the view of regulators during the Obama administration, when Mr. Biden was vice president.
The number of merged hospitals 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 — combining a powerful cable and internet provider with a media giant — with conditions that the company’s own executive vice president, David Cohen, dismissed as not “particularly restrictive.”
Only one of three Democrats at 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 the marketplace, providing consumers with more programming choices.”
In 2016, Tom Vilsack, Mr. Obama’s agriculture secretary, who has resumed that role for Mr. Biden, downplayed the harms of agriculture mergers.
“I don’t think just because a couple of the major players are going to potentially merge or consider some other kind of arrangement that that necessarily long term absolutely guarantees that farmers are going to have less choice,” Mr. Vilsack said in an interview with USA Today.
Mr. Biden has directed federal regulators to consider a harder line against corporate consolidation in hospitals, health insurance, meat processing and tech, which could include revisiting past mergers that were approved.
And his antitrust regulators are trying to unwind mergers approved during the Obama years. The Federal Trade Commission’s recent lawsuit to break up Facebook centers on the company’s purchases of Instagram in 2012 and WhatsApp in 2014. The agency did not block the mergers, saying it did not see enough evidence of harm to consumers and competition.
Those decisions have come back to haunt the F.T.C. The federal judge who threw out its Facebook complaint in June questioned the about-face and why the commission had waited so long to try to unwind those deals.
Courts have become increasingly conservative in antitrust cases, adhering more strongly to the belief that higher prices are the strongest sign of competition violations.
Administration officials acknowledge that challenge and say they are scrutinizing the antitrust views of prospective judicial nominees, in hopes of bending the courts toward a more sympathetic view of government efforts to block mergers and break up monopolies.
This article was originally published by NY Times. Read the original article.
ThinkCivics researches, examines, and reports on issues that matter most. We deliver explanative, fearless, and insightful analysis for public consumption.
