A series of bills currently pending before Congress would substantively alter antitrust law in ways that would sap our economy’s potential for future growth and innovation. The bills masquerade as a salve for all manner of grievances held against a handful of “Big Tech” firms, but in reality, if these bills become law, they will mark the beginning, not the end, of the government’s latest assault on the free market.
Here’s three reasons why the pending antitrust bills easily could serve as a gateway to sweeping changes across the economy.
1. Market Capitalization Changes Over Time
The bills seek to regulate companies that exceed a certain market cap. However, market capitalization has nothing to do with evaluating competition. But even setting aside that point, the bills suggest that they can neatly create a firewall and only capture specific, targeted tech companies, without implicating other companies or industries.
The problem is market-capitalization rises and falls, often over short periods of time. The largest companies by market cap today are not the same from a decade ago and are unlikely to be the same ten years down the road. So today, the bill may only capture a few companies targeted by the legislation, but that will change over time. A recent economic study concludes that 13 companies from various industries could reach the market-cap threshold in the near future, potentially subjecting these companies’ business practices to be stringently managed by the Department of Justice and Federal Trade Commission.
2. Contagion Effect of “Unfair Methods of Competition”
Each of the pending bills outline a series of business practices that would be deemed “unfair.” Yet all of these practices are routinely used today by competitors not only in the same industry, but also by every industry. Under these bills, any company that both sells its own line of products, and the products of competitors, could be accused of competing “unfairly.” Most retailers, for example, have their own store brands. These business practices are lawful under existing antitrust law because they often produce real benefits to consumers. They increase competition and can lead to lower prices. It is naive to think that declaring business conduct arbitrarily unlawful for just a few companies will not, over time, become unlawful for all.
In fact, the legislation will empower the FTC to enforce the new law under its Section 5 authority. Under Section 5, once the FTC deems a business practice unlawful, it if free to argue that the same practice is unlawful for all of business, regardless of the sector of the economy.
3. Emboldens a Government-Knows-Best Approach to Managing Our Economy
These bills rest on a misguided belief that the entire economy has become concentrated and that a monopoly problem lurks in every industry. In the name of “fairness,” their solution is to empower government, because it knows best, to pick winners and losers in our economy. FTC Commissioner Wilson has even gone so far as to compare this Neo-Brandeisian philosophy and its proposals to Marxism.
These bills represent a gateway to a larger agenda, an agenda supported by the false notion that our economy is over-concentrated, stagnant, and anticompetitive, and that the government, not the market, should dictate economic outcomes. And this agenda is hiding in plain sight at the highest levels of our government.
President Biden’s Executive Order on competition states:
“This order recognizes that a whole-of-government approach is necessary to address over-concentration, monopolization, and unfair competition in the American economy.”
Senator Amy Klobuchar tweeted:
“It’s not just Big Tech. From cat food to caskets, monopolies are developing across markets. It’s time to make antitrust cool again, promote competition, and prevent one company from holding all the cards.”
Congressman Ken Buck said at a University of Chicago event:
“If we can’t get meaningful legislation on big tech, we won’t be able to get meaningful legislation passed for other industries.”
Clearly, a vote in favor of these bills is a Trojan horse to support a larger, government-knows-best agenda. Such an agenda would radically alter our free-market economy and make us less competitive.
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