Recent antitrust push is weirdly narrow, pretending telecoms and banking don’t exist
As you have probably noticed, there is great “antitrust” news going on in Washington. As you may also have noticed, many of these proposals don’t do much actually reform US antitrust or monopoly issues generally. For decades, academics have warned that the enforcement of antitrust laws in the United States has become unable, and that we need to rethink our approach to antitrust in a world where companies often seem to have more and more power over our lives.
The United States is dominated by anti-competitive giants in banking, telecommunications, insurance, healthcare, airline and countless other industries. And generally speaking, we have always encouraged them by underfunding our regulators, regularly weakening antitrust enforcement, ex officio approving mergers after a terrible merger, and replacing judges. bobblehead dolls. All under the pretext that doing anything else would be disastrous, while clinging tightly to a standard of consumer welfare that at times seemed unable to meet market, labor and consumer harm.
That’s a lot to fix, but with this vast, interconnected dysfunction so profitable, and with so many cross-sector companies (with endless budgets and immense lobbying control over Congress) opposed to real reform and oversight, it doesn’t. seems unlikely to actually happen. Instead, we got something else. A new wave of very selective “antitrust reform” which focuses exclusively on “big technologies”, while leaving sectors like banking or “big telecommunications” free to unleash. Despite the evidence that these latter sectors are actually doing things that harm consumers (the supposed standard of competition).
The movement to curb big tech and strengthen antitrust enforcement certainly has valid elements, based on a justified anger at years of questionable business practices. But this anger has proven to be exploitable by people like Press company and AT&T. The two companies are looking to convince their Silicon Valley competitors of online advertising with rules that do not apply to their own businesses, while demolishing the constraints and oversight of their own sectors (see: net neutrality, dismantling of FCC authority, or the constant erosion of media consolidation rules protect small businesses).
Enter Representative David Cicillin, Head of the Antitrust Panel of the House Judiciary Committee. He says Democrats have introduced a following various antitrust bills in the belief that he will be keep “big technology” on your heels, which makes it more difficult to defeat a centralized bill. He says that by narrowly targeting specific antitrust issues, it will be easier to get the 10 Republican votes needed to pass the bills with a majority of 60 votes in the Senate. But so far, there is no indication that the obstructionist GOP, whose interest in “antitrust reform” has generally been of the performative populism genre, has every interest in helping (the last time I saw the proposals there were about 3 GOP votes in the House, just enough to market the effort as “bipartisan”).
Meanwhile, many bills are oddly selective in what they see as a “dominant platform.” the Competition Law and Platform Opportunities (pdf), for example, drastically restricts what constitutes a monopoly infringer, ensuring there are exceptions for the telecom giants, Mastercard, VISA and Walmart. The bill prohibits companies from owning or operating a business that “has a clear conflict of interest,” but only if the business in question has 50 million monthly active US users and a market capitalization of more. of $ 600 billion:
“… is owned or controlled by a person with annual net sales, or a market capitalization greater than $ 600,000,000,000, adjusted for inflation based on the Consumer Price Index, at at the time of the designation of the Commission or the Ministry of Justice under section 4 (a) or one of the two years preceding that date, or at any time during the 2 years preceding the lodging of a complaint for an alleged violation of this law.
Again, this very specific restriction omits a parcel companies that engage in the same type of anti-competitive behavior, many of which see overlapping markets dominated by tech giants (telecoms). It is also a kind of arbitrary restriction given that what others like you is not necessarily what determines whether or not you engage in anti-competitive behavior. Actual anti-competitive behavior does.
But one only has to look at the $ 600 billion valuation threshold to understand how this plot came about. Based on this definition (including the number of US users), it appears that the law only applies to Apple, Microsoft, Amazon, Google (Alphabet) and Facebook. That’s it. It seems notable that companies which are also quite powerful and dominant, but which fall just a little below the threshold, include Visa, Mastercard, JP Morgan Chase, Bank of America, Walmart, Disney… and Comcast, AT&T and Verizon. How very, very interesting.
It’s hard to argue that different rules should apply to Amazon versus Walmart. Or that Comcast, AT&T and Verizon should be spared such an antitrust scrutiny, when their control in some markets is clearly a much greater stranglehold than the five companies involved. It’s almost as if these bills are designed to be a performative attack on a single sector while pretending otherwise.
This does not mean that all the proposals in all bills lack merit or benefit. I think at least part of the An Act respecting the modernization of merger filing fees does something important: namely to strengthen the lagging funding of the FTC at a time when the agency is being asked to do more and more with a fraction of staff and resources of their international counterparts. Remember that one of the main reasons the telecommunications lobby neutralized net neutrality and FCC oversight was because they knew that enforcement responsibilities would fall on an FTC without the resources, the personnel or authority necessary to do the job properly.
But given the tight restrictions on most of the proposals, I still wonder how much these bills have contributed to media / telecom policy and lobbying as authors who have made compromises for the sake of ‘bipartisanship’. “. Telecom giants like AT&T and Comcast have passed the latest three or four years successfully convince many DC policymakers that the Silicon Valley giants are the only dominant giants worth worrying about. Rupert Murdoch played similar reindeer games. The so-called “big tech” monopolies are the only monopolies that need immediate benefits at the same time, and harnessing the public’s legitimate anger against big tech is not particularly difficult at this time on either side of the world. the aisle.
The US antitrust is certainly in need of reform, but we are unlikely to get it through legislation so compromised for the sake of “two-party” rule that it views the issue through a pinhole. . Or via bills heavily shaped by telecommunications and media monopolies that want to be excluded from meaningful scrutiny. Lina Khan’s appointment suggests government awareness the narrowness of the consumer welfare standard in the Amazon era. But like so many questions (the climate quickly comes to mind), passing meaningful legislation will first require cleaning up corruption from Congress, and that still looks way beyond the horizon.
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