UPDATE, 11:04 AM PT: Joe Biden signed a wide-ranging executive order signaling that his administration will take an aggressive stance toward antitrust enforcement, with calling on federal agencies to take more than 70 actions to counter the wave of consolidation across the economy.
Standing with Biden as he signed the executive order was the new chairwoman of the Federal Trade Commission, Lina Khan, and the acting chairwoman of the FCC, Jessica Rosenworcel.
The order not only calls for stricter antitrust enforcement, but even a review of mergers that already have gotten the government green light.
“Let me be clear: capitalism without competition isn’t capitalism, it’s exploitation,” Biden said, as he suggested that he wanted to shift direction from the way that antitrust laws have been interpreted in the past 40 years, rooted in the idea that proposed business consolidations should be evaluated on the way that they impact consumer welfare. But Khan and others have argued that such an approach has helped allow companies like Amazon and Google into trillion-dollar behemoths, as they operate at such a scale to offer lower prices or their services for free.
What will be the impact on pending media mergers? After Amazon announced plans to acquire MGM, lawmakers quickly criticized the deal as a further extension of the tech platform’s reach, and have called on federal regulators to take a close look at the transaction. But the relative size of the studio, especially compared to Hollywood’s major studios, has raised doubts among a number of antitrust experts that the government could win a court challenge should it sue to block the deal. Amazon has pointed to other recent, far larger mergers, like The Walt Disney Co.’s combination with much of Fox, that got the government greenlight with relatively little turbulence.
Biden also singled out cable and telecom companies as targets of some of his proposals, as he noted that 65 million Americans are in areas with only one high-speed Internet provider. His executive order calls for a ban on such things as excessive early termination fees and ending landlords exclusivity agreements with just one Internet provider.
The industry immediately keyed in on some aspects of the order, including Biden’s call to restore net neutrality rules. NCTA — The Internet and Television Association, said in a statement, “We are disappointed that the Executive Order rehashes misleading claims about the broadband marketplace, including the tired and disproven assertion that ISPs would block or throttle consumers from accessing the internet content of their choice.”
In a statement, Rosenworcel said after the ceremony, “Our economy thrives on competition. It is the reason the United States is home to some of the most dynamic companies in the world. I welcome this effort by the President to enhance competition in the American economy and in the nation’s communications sector.”
PREVIOUSLY, UPDATED: President Joe Biden plans to sign an executive order on Friday that calls for greater scrutiny of mergers, a restoration of net neutrality rules and limits to corporate non-compete agreements.
As much as Biden will highlight the potential benefits to consumers and workers by some of the measures, a number of the proposed changes will require federal agency action or Congressional approval.
But Biden intends to highlight the consolidation in the marketplace to make the case that a lack of competition drives up prices.
The executive order singles out a series of industries, including tech, banking, agriculture, healthcare and transportation, while identifying what the White House sees as specific problems in the marketplace, like Internet providers’ pricing practices.
But the impact of the proposed changes, if implemented by agencies like the Federal Trade Commission, would be across other sections of the economy.
According to an outline of Biden’s executive order released by the White House, he plans to call on the FTC to ban or limit non-compete agreements, commonplace clauses in employee contracts in some sectors of media and other industries, although they are general unenforceable in California. The White House said that half of private sector employers require employees to enter non-compete agreements, and it affects 36 million to 60 million workers.
Another proposal is that the FCC restore net neutrality rules, which were rolled back during the Republican-dominated FCC of the Trump years. But the FCC is split 2-2, and any action is unlikely until Biden nominates a third Democrat to fill the slot.
A large portion of the executive order will focus on the tech sector, as it targets some of the business practices of the large platforms.
The administration wants the DOJ and FTC to give proposed mergers overall greater scrutiny, but to pay “particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” Biden also plans to call for the FTC to establish rules barring methods of unfair competition on internet marketplaces. That clearly is aimed at Amazon, which has been the subject of scrutiny on Capitol Hill for the way that it has been selling its own products on its platform against those of rivals. The administration also wants the FTC to create rules on surveillance and the collection of data by tech giants.
Lawmakers already have sounded the alarm over such practices among the tech giants, including a series of bills that recently passed the House Judiciary Committee, and if they ever became law, they could force platforms to shed some of their assets. But the prospects for the bills are uncertain, even as the legislation has drawn bipartisan support.
More immediate may be action at the agency level, as Biden signals a desire to step up antitrust enforcement.
Biden has in place a champion for rigorous antitrust enforcement on the FTC — Lina Khan, confirmed last month as a commissioner and quickly appointed as chair — but he has yet to nominate someone to lead the Justice Department’s Antitrust Division.
Biden’s EO will not only call on the agencies to enforce antitrust laws more vigorously, but remind them that the law allows them to challenge past mergers. The White House will establish a Competition Council to monitor the progress on the administration’s proposal.