Sen. Elizabeth Warren loves talking about antitrust. In fact, she says, she can’t think of anything more fun to talk about.
Antitrust is not a topic most people associate with “fun,” but the Massachusetts Democrat’s passion for it is entirely believable. It’s not just the excitement and earnestness with which she talks about competition laws and how to change them; it’s also the fact that she has been talking about it for years. Longer, in fact, than many of the politicians who talk about it now.
She’s also why many of them are talking about it now. Warren took antitrust reform and anti-monopoly power out of relatively small academic and advocacy circles and thrust it into the national conversation. Then she ran for president and brought the phrase “break up Big Tech” — and the concept — into the mainstream. Now there’s an administration and a Congress in place that might actually do some of the things she’s been pushing for. And Warren is still talking, because she still has a lot of work to do.
“Getting everybody lined up to push back against a powerful, well-financed industry is tough,” Warren told Recode. “But the fact that it’s tough doesn’t mean it’s okay not to do the work. It just means shame on Congress for not sucking it up and doing what needs to be done.”
She’s referring to a package of bipartisan, Big Tech-targeted antitrust bills. Some of those would change things a lot; they could, indeed,
break up Big Tech. Those bills are also going nowhere in Congress. The bills that are much more likely to pass — but whose progress has been slow — give a few massive companies
new rules about how they can run their digital platforms and services.
If you’ve only been paying attention to the Big Tech antitrust reform movement for the last, say, year and a half, you may not realize how instrumental Warren has been in building it. She ceded much of that Break Up Big Tech spotlight to the prominent Big Tech critics heading up the two federal agencies that enforce antitrust laws — the Federal Trade Commission (FTC) and the Department of Justice (DOJ) — and the lawmakers heading up those antitrust bills. Warren isn’t on the Judiciary Committee that those bills came out of, and her name isn’t on any of them.
But now Warren has an even more ambitious project: Her new bill, the Prohibiting Anticompetitive Mergers Act, doesn’t just break up Big Tech: It breaks up Big Everything, and it prevents companies from getting too big in the future. It would also fundamentally change how agencies evaluate and block proposed mergers, a process that currently gives companies a lot of power and agencies relatively little. Warren says the bill crystallizes her vision for how the government can stop industry consolidation that has broken America’s markets, hurt its economy, and threatened its democracy.
The bill comes at a time when the auspicious beginnings of the Biden administration’s pro-competition, anti-monopoly agenda have given way to the reality of how difficult it is to actually get things done. With midterms approaching, however, things appear to be picking back up. Congress is poised to pass some of those antitrust bills and confirm Alvaro Bedoya, the Democratic commissioner the FTC needs to fully carry out its chair’s vision. Warren says she “gives props” for Biden’s pro-competition
executive order, which is
making progress. But Biden
was also slow to officially support those antitrust bills, and his administration has
pushed back on the European Union’s attempts to regulate Big Tech.
Elizabeth Warren has a few things to say about all that.
Mergers don’t just affect consumers — sometimes workers bear the impact
Why introduce a big new antitrust bill when Congress is close to passing a few other antitrust laws? The answer lies in chicken sandwiches.
The Big Tech antitrust bills address one industry, and only a few players in it. But many other industries have become hugely consolidated over the last several decades. Chicken,
for example. That consolidation has been blamed for everything from the high prices you pay for that chicken to the low prices farmers are forced to sell their chickens for to the few poultry-producing giants out there. But the harm isn’t just in the prices, Warren says. It’s also in who makes sandwiches out of that chicken.
“Think about two fast food chains in a region,” she said. “One of them does hamburgers almost exclusively, and the other one does chicken sandwiches almost exclusively.” They can merge, and keep their prices and products the same. As far as the consumer is concerned, nothing has changed for their wallet or their taste buds. Antitrust agencies, which typically
only look at consumer welfare when reviewing mergers, will likely approve it. But mergers don’t just affect consumers: “The world has changed for those workers,” Warren said.
The two chains no longer have to compete with each other for employees by offering superior wages, benefits, and working conditions — so, Warren says,
they don’t offer those things. Studies have shown that as markets become more concentrated, wages
stagnate. And that means you might have less money to spend on that chicken sandwich. It’s more expensive, even if its price stays the same.
“If we want the benefits of competition, then it means when markets get very concentrated, we need to look at what we’ve lost,” Warren said. “Not just in terms of consumer choice. It’s very important, but it’s not the only thing.”
The bill would require antitrust agencies to take factors like impact on the labor market into account in addition to the impact on consumers. The bill isn’t limited to Big Tech (or chicken sandwiches), but Big Tech companies won’t be thrilled if the criteria for evaluating mergers expand — especially the ones that haven’t had to worry about consumer welfare standards because their products are free. That’s also assuming their proposed merger isn’t prohibited outright. Under Warren’s new bill, mergers over a certain size or that consolidate the market too much are forbidden. And consummated mergers that have harmed competition, workers, consumers, or competitors can be broken up.
The Prohibiting Anticompetitive Mergers Act also fundamentally changes the agencies’ merger review process and power. Right now, if companies want to merge, it’s on the FTC or the DOJ to make the case for why they shouldn’t, and they have to sue the companies to block them. The onus is entirely on the agencies, which oversee thousands of mergers a year. With relatively little in resources, they can only challenge a few of those mergers. Doing so may mean a long court battle that’s difficult to win.
With Warren’s bill, it’s the companies that have to do the work. They have to show that their proposed merger won’t harm competition, consumers, and the labor market. If they can’t, the agencies have to reject it. The companies have to sue if they still want to merge. Ideally, companies will try to merge less, and the mergers they do try won’t be harmful.
“It’s going to change how mergers are even conceived of by the companies,” Alex Harman, director of government affairs, antimonopoly, and competition policy at Economic Security Project Action, said. “Because then it’s not like the game of Monopoly where it’s just collecting assets. It’s now going to be like, ‘Oh, I actually need to make a case for this,’ that there’s a lack of harm, and that there’s a benefit.”
It’s a seemingly complicated bill that tries to make things simpler. Instead of adding regulations to one industry that its most powerful players can figure out how to work around, she just wants to break them apart.
“Structural change, where possible, minimizes regulation and maximizes the benefits of a functioning market,” Warren said.
Charlotte Slaiman, competition policy director at nonprofit Public Knowledge, says she likes what the bill is trying to do and sees the need for it. But she’d like more antitrust experts to weigh in before the bill becomes law, because it’s such a big change: “to make sure that we’re getting the details right.”
And William Kovacic, a competition law professor at George Washington University and former Republican FTC chair, said the bill left him with too many questions on how it would actually work in practice. For example, he said, there’s a list of general things agencies have to consider when deciding to approve a merger, but not much detail or guidance beyond that. So it’s left to the agencies to create the definition of harms to competition, workers, and small and minority-owned businesses.
“And where you have lots of discretion, here come the political influencers from Congress, from the executive departments from the White House, the lobbyists all come parading into my office and tell me what to do,” Kovacic said. “If I’m going to have to do this, I just want to know how ... [Congress] can’t just drop this into my lap. You figure it out.”
Prayers up for Mrs. Warren.
