Antitrust Winds Are Shifting
- posted: Jul. 16, 2021
“It is the policy of my Administration to enforce the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony – especially as these issues arise in labor markets, agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity.” Joseph R. Biden, Jr., Executive Order, July 9, 2021.
With this policy statement, the White House launched the formation of a “White House Competition Council” to begin a federal focus on enhancing enforcement of the Sherman Act and the Clayton Act antitrust laws.
The primary impetus behind this enforcement focus appears to be market power consolidation in the following industries: agriculture, Internet platform providers, prescription drugs, healthcare insurance, healthcare providers, broadband/cable providers, and the global shipping container industry.
One aspect of the White House's enforcement strategy is to elevate the various agencies of the federal government that have some connection with these industries, or with competition in general (e.g., the FTC), into a heightened watchdog role. I am not sure how well that will work in practice. I have always looked to the Department of Justice’s Antitrust Division for its guidelines and case filings as the bellwether in this area of law, and I do not think that will change. But the DOJ may lack the nuts and bolts knowledge within certain industries that other agencies can provide, so from a strategic standpoint, this is not a bad idea.
The Executive Order virtually telegraphs another aspect of the White House's enforcement strategy: “the United States retains the authority to challenge transactions whose previous consummation was in violation of the Sherman Antitrust Act . . . the Clayton Antitrust Act . . . or other laws . . . .” That sentence indicates that mergers that may have already completed Hart-Scott-Rodino filings without timely agency challenge -- may still be challenged. Caveat: I am not sure I am reading these tea leaves correctly, but if I am, it will get interesting. Might some mergers that I was surprised to have passed HSR review now face unwinding? Maybe.
Other ancillary issues receiving some attention in this announcement include employee non-compete agreements, over-concentration and monopolization in general, occupational licensing restrictions (presumably at the state level), suppliers to agricultural markets, and craft brewers – who, as an aside, to me seem to be doing very well without federal aid. But what do I know?
On the HR side, the AG and FTC Chair are "encouraged" to consider whether to revise the Antitrust Guidance for Human Resource Professionals of October 2016. If POTUS encourages you to do something, you are probably going to do it.
My Take – serious winds of change are starting to blow. As a BIG consumer of healthcare services and prescription drugs, I can say, “Rah Rah.” But, in many other respects, I think there is a lot of room to misjudge economic efficiency that benefits consumers with market consolidation that is harmful to consumers. The pendulums of governmental policy tend to over-swing. Some reform is probably healthy; a lot of reform – not so much. As is often so, moderation would be best.
May you find joy in what you do and who you are with.