Noticias

Biden backs free competition with executive order aimed at limiting monopolies

This article first appeared in El País on July 9, 2021.

The President of the United States, Joe Biden, has signed this Friday an ambitious executive order – 72 initiatives by 12 federal agencies – whose ultimate goal is to promote competition in all areas of the economy. Agriculture and large meat companies, the pharmaceutical industry, transport, Internet providers and financial services: there is no sector that is not covered by the Democratic Administration’s latest decree. The measure aims to curb abuses of their market position by a few companies, resulting in higher prices for the consumer. Without naming them, big tech is on everyone’s mind, given the ongoing bipartisan offensive – Democrats and Republicans in lockstep – against Big Tech. “Let me be very clear, capitalism without competition is not capitalism, it is exploitation,” the president said after signing the executive order.

But the executive order against anti-competitive practices goes much further, and even targets the fine print of service provision. The initiative calls for an end to non-compete clauses in the labor market, greater transparency in baggage fees or airline ticket refunds, in Internet providers’ rates, and more oversight of the technology market: in short, eliminating the usually unnoticed conditions in commercial transactions that affect millions of employees, consumers and small businesses every day. “No more tolerance for abusive actions by monopolies, no more harmful mergers that result in massive layoffs, higher prices and fewer choices for workers and consumers,” Biden said at the White House during the signing ceremony for the executive order, which “commits the federal government to full and vigorous enforcement of the antitrust laws.”

The executive order does not impose immediate decisions, but it does urge the dozen government agencies in charge of its development to take steps to “quickly address some of the most pressing [free] competition problems in our economy,” explains the briefing document released by the White House prior to the official signing ceremony. The goal is clear: “To promote competition in the U.S. economy, which will lead to lower prices for families, higher wages for workers, innovation, and even more powerful growth,” the memo explains. The percentage of new business start-ups in the country, the text recalls, has fallen by almost 50% since the 1970s because of the concentration of a few large companies, which account for a large part of the market in 75% of the country’s economic sectors.

The decree for free competition that Biden signed this Friday – the umpteenth of a bold and progressive mandate – urges regulators to intervene more decisively in key markets such as technology. Biden’s intention to curb the omnipotent power of the big Silicon Valley firms is not lost on the team of collaborators he has assembled. Among them are Lina Khan, in charge of the Federal Trade Commission (FTC) and one of the most critical voices against the monopoly of technology companies, or Tim Wu, member of the National Economic Council -the White House’s economic advisory group-, also opposed to the monopolistic practices of Big Tech. One of them, Amazon, announced its intention to appeal Khan’s appointment as head of the FTC.

Calling on government agencies to protect individuals in the face of a capitalized market could be seen as a sign of interventionism that would make the hair on the back of the neck stand on end for Republicans, and even the more moderate Democrats. But the sign of the times seems to favor the firmness of the administrations towards the big monopolies: not only are dozens of complaints filed by prosecutors and states against their alleged abuses, but Congress is also moving forward with the adoption of laws against unfair practices. The latest move came last week, when a bipartisan group of legislators urged the FTC to file a new lawsuit against Facebook, after the one filed in December by 48 states against the Palo Alto company was dismissed.

Biden’s umpteenth initiative on behalf of the middle class – “the backbone of America,” as he often calls it – therefore abounds in a state of opinion predisposed to certain limits. In the area of technology, the Biden Administration will pay special attention to “the acquisition of emerging competitors, serial mergers or the accumulation of data”. The Federal Communications Agency (FCC) will have to restore the rules imposing the so-called “net neutrality”, adopted under Barack Obama and repealed by Donald Trump. The father of the “net neutrality” concept is Tim Wu, one of Biden’s economic advisors.

For workers, the White House intends to limit exclusivity or non-compete clauses in contracts and restrict the number of functions for which a license is required. This would allow for easier job switching and higher wages, according to the document advanced by the White House. In health care, the proposal to import drugs from Canada, where they are less expensive, to lower the pharmaceutical bill stands out.

A newly created competition committee will be in charge of “coordinating the federal government’s response to the growing power of big business”.

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