Biden’s Antitrust Revolutionaries by Eric Posner

A growing debate over the scope and purpose of U.S. antitrust law has pitted traditional technocrats against a bottom-up movement that demands stricter legislation and more aggressive enforcement. The stakes are not only questions of price or production, but the proper functioning of American democracy.

CHICAGO – With prominent anti-monopoly activist Lina Khan appointed as the new chairperson of the Federal Trade Commission, now is a good time to consider what influence the so-called New Brandeisians will have on US antitrust law. Khan is a leading figure in this movement, and another prominent representative, Tim Wu, now sits on President Joe Biden’s National Economic Council. Arguing that antitrust law and its enforcement are too weak and ineffective, the New Brandeisians, named after U.S. Supreme Court justice Louis Brandeis, are more open than traditional antitrust experts to dissolving monopolies.

Even before the New Brandeisians rose to prominence, there was a growing consensus that U.S. courts and regulators were not enforcing antitrust law as vigorously as they should. A long period of lax enforcement has led to more concentrated markets, higher prices for consumers and soaring corporate profits. A partial solution is to give regulators more resources and strengthen the standards that regulators use to approve mergers of large companies. A bill sponsored by Senator Amy Klobuchar of Minnesota proposes to do just that.

But beyond supporting these simple measures, the consensus among antitrust experts is dissolving. The debate is shaping up to be a debate between centrist or center-left technocrats who consider more enforcement resources and higher fusion standards to be sufficient, and the new Brandeisians who seek much more. (The right seems to be sitting on the sidelines, just scolding that big tech companies are discriminating against Republicans.)

Technocrats, on the other hand, are committed to traditional antitrust analysis, which balances the advantages of market competition against the advantages of size. They believe that companies should be allowed to grow by offering superior products and services, even if they end up dominating the markets. Mergers should be allowed as long as they generate economies of scale which outweigh the anti-competitive effects.

The new Brandeisians draw their inspiration from the anti-monopoly agitation of the golden age. Late 19th century populists and 20th century progressives like Brandeis were not primarily concerned with efficiency, nor did they carefully distinguish between the effects of monopoly on prices, wages, competition and efficiency. other economic variables. Their argument was that the “thief barons” – men like oil mogul John D. Rockefeller and steel mogul Andrew Carnegie – and their companies were just too powerful. Their political and economic power was incompatible with democratic autonomy. This is the problem that the antitrust law was supposed to solve.

In the new antitrust debate, Big Tech is the flashpoint. When technocrats look at this industry, they see companies that offer superior products and services for little, if any, cost. Business practices that raise antitrust concerns can be dealt with according to applicable standards and should only be condemned after they have proven that, despite appearances, they raise prices. But the new Brandeisians see the recurrence of the monopolization of the Golden Age and insist that while the damage is not recognized by traditional antitrust analysis, it is.

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One such damage is political interference. Monopolies no longer pay lawmakers bribes like they did in the 19th century, but Big Tech clearly wields substantial influence over American politics. Democrats continue to complain that Russians used Facebook to spread disinformation ahead of the 2016 election, while Republicans complain that Facebook and Twitter kicked Donald Trump from their platforms. Depending on how you watch it, YouTube either broadcasts conspiracy theories or censors legitimate political dissent.

Another concern is perceived injustice. Google provides search results that include listings of products and services owned by Google. The Apple App Store sells Apple apps that compete with third-party apps. Critics argue that these companies and others are leveraging the information they get from competitors who use their platforms to give their own products and services a competitive edge.

Another problem is the consumer’s loss of autonomy, due to the fact that Big Tech knows everything about us, from our purchasing habits and our research histories to our medical records and personal communications. Never before have we known so many people. In authoritarian countries, this information is shared with the government. In the United States, not so much; but it’s shared with other companies, and it often falls into the hands of hackers and other bad actors. Worse yet, some tech companies have used their engineering prowess and psychological know-how to hook and manipulate users.

Finally, big tech companies are seen as a threat to a diverse and textured internet economy. Many people bemoan the loss of original online offerings, which have been replaced by the lackluster monocultures of Facebook, Google and Apple. The suddenness of this change helps explain why people were once so upset when Walmart moved in and destroyed the central shopping districts of many small towns. As prices fell, a unique, often beloved local business ecosystem was lost. Now, many cities are investing taxpayer dollars in downtown revitalization efforts, using public funds to recreate amenities that the public loved and that the market destroyed.

In this context, mainstream economists argue that antitrust – a technical area of ​​law concerned with economic efficiency – is not the solution. Threats to small towns or broader democratic and economic values ​​are best addressed by campaign finance laws, zoning laws, health and safety regulations, etc. There is a lot of common sense to this point of view: if we replace antitrust law with a comprehensive judgment on the good and the bad that a large company can do, regulators and courts will fail and political considerations will prevail. . It would be better to tackle the pathologies of the tech market with a well-defined legislative reform.

But the new Brandeisians would respond by pointing out that big business can use their political power to block these same reforms. After all, tech giants have already stood up against privacy and data protection, and regulating corporate speech is going nowhere with the current Supreme Court precedents protecting it.

Remember that the main concern of the 19th century about monopolies was that they wielded too much political power. If you downsize them, they may not, allowing democracy to flourish. Antitrust law is the only tool in US law to convert a large company that has too much power into a group of small companies that do not.

Thelma J. Longworth

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