The 2020 election placed antitrust at the center of the presidential campaign.1Herbert Hovenkamp, The Warren Campaign’s Antitrust Proposals, Regul. Rev. (Mar. 25, 2019), https://perma.cc/4HQH-BK3P (noting that “[a]ntitrust policy promises to be an important issue in the 2020 presidential election, and for good reason”); see also John D. McKinnon & Ryan Tracy, Where Trump and Biden Stand on Big Tech, Wall St. J. (Sept. 17, 2020, 6:40 PM),
https://perma.cc/7JMK-CH84. The last time antitrust was central to presidential debate dates back to 1912, which lead to the passing of two major antitrust laws in 1914: the Federal Trade Commission Act and the Clayton Act.2Daniel A. Crane, All I Really Need to Know About Antitrust I Learned in 1912, 100 Iowa L. Rev. 2025, 2027, 2036–37 (2015) (noting that “[t]he 1912 election had immediate consequences for competition policy, both through Wilson’s victory and through broad consensus themes that emerged from the candidates’ interactions”); William Kolasky, The Election of 1912: A Pivotal Moment in Antitrust History, Antitrust, Summer 2011, at 82, 84 (emphasizing that “[n]ot surprisingly given the important role antitrust policy had played in the contest of the Republican nomination, Taft, Roosevelt, and Wilson all devoted a substantial portion of their acceptance speeches to laying out their competing antitrust programs”). Would Biden’s term lead to long-lasting changes? Many have speculated that “Biden antitrust”—or the antitrust record under the Biden Administration—would be torn between President Biden’s inclination to remain a moderate democrat and the Progressives’ antitrust populism.3Daniel A. Crane, On Antitrust and Big Tech, Biden Must Return to His Centrist Roots, The Hill (Apr. 13, 2021, 5:01 PM), https://perma.cc/E5KE-CZ2Z; William E. Kovacic, Noah Joshua Phillips & Aurelien Portuese, Dynamic Antitrust Discussion Series: “Biden Antitrust,” Info. Tech. & Innovation Found. (Mar. 16, 2021, 10:00 AM), https://perma.cc/5N7M-EVCY (where Commissioner Noah Phillips expressed that he was “pessimistic about the capability of anti-trust to fulfill all of the promise that many advocates have placed in it”); Claude Marx, Biden Looks Left for Views on Antitrust Issues, FTCWatch (July 27, 2020) (pointing out that “[t]hough presumptive Democratic presidential nominee Joe Biden had a center-left record on legal issues during his Senate career, some of his party’s more liberal voices have been influencing his view on antitrust policies”); see also Joshua Wright & Aurelien Portuese, Antitrust Populism: Towards a Taxonomy, 25 Stan. J.L. Bus. & Fin. 131, 180 (2020) (concluding that “[t]he stakes are high. A return to antitrust populism signals a potential return to market share and conduct presumptions that protect small firms from their more efficient rivals”). The populist approach to antitrust advocated by the “New Brandeis Movement”4On the “New Brandeis Movement,” see Lina Khan, The New Brandeis Movement: America’s Antimonopoly Debate, 9 J. Eur. Competition L. & Prac. 131, 132 (2018) (noting that “the very fact that antitrust is again at the centre of political debates shows that the New Brandeisians have already made a big mark”); see also Daniel A. Crane, How Much Brandeis Do the Neo-Brandeisians Want?, 64 Antitrust Bull. 531, 533 (2019) (asking “[c]an one seriously style herself a Brandeisian if she adopts Brandeis’s abhorrence of bigness in industry but not in government? At least some of the neo-Brandeisians seems to think so. . . . This is surely quite selective anti-bigness”); A. Douglas Melamed, Antitrust Law and Its Critics, 83 Antitrust L.J. 269, 269–92 (2020) (emphasizing that “[w]hile the populist critics broadly share a concern about concentrations of power, they have various and potentially conflicting objectives”); Seth B. Sacher & John M. Yun, Twelve Fallacies of the “Neo-Antitrust” Movement, 26 Geo. Mason L. Rev. 1491, 1530 (2019) (concluding that Neo-Brandeisian proposals would “make antitrust less, rather than more, effective in its core mission, while doing little to ameliorate the other problems with which they are concerned”); Joseph Coniglio, Why the ‘New Brandeis Movement’ Gets Antitrust Wrong, Law360(Apr. 24, 2018, 1:02 PM),
https://perma.cc/JSP6-FENG (arguing that “the broader narrative that constitutes the intellectual gestalt of the [New Brandeis Movement] seems to suffer from a misunderstanding not only of the Chicago School, but also the American constitutional-republican tradition it purports to represent”). castigates all forms of market power and aims at deconcentrating the economy by populating the market with small and medium-sized companies irrespective of the consumer welfare standard and of innovation considerations.5See generally Aurelien Portuese, Populism and the Economics of Antitrust, in The Palgrave Handbook of Populism 227 (Michael Oswald ed., 2022).
Contrary to the expectation that Biden antitrust would somehow choose “a middle way” between antitrust populism and antitrust traditionalism, the first year of the Biden Administration has unambiguously embraced antitrust populism. Most notably, President Biden issued an Executive Order on Competition in July 20216Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (July 14, 2021); see also Press Release, White House, Fact Sheet: Executive Order on Promoting Competition in the American Economy (July 9, 2021), https://perma.cc/4R2M-2ZD6; Herbert Hovenkamp, President Biden’s Executive Order on Competition: An Antitrust Analysis, 64 Ariz. L. Rev. 383, 416 (2022) (warning with the Executive Order that “[s]ometimes it is tempting to look back nostalgically at the age of Brandeis and admire the protection of small firms from the incursions of chain stores and organized distribution. But that movement failed miserably—as it should have, for the simple reason that customers did not prefer it”); Sheila Adams, Christopher Lynch & Margaret Tahyar, President Biden’s Executive Order on Promoting Competition, Harv. L. Sch. F. on Corp. Governance (July 20, 2021), https://perma.cc/B79N-9VLS (anticipating that “[m]any agency actions resulting from the Competition Order will be subject to legal challenge”); Robert D. Atkinson, Aurelien Portuese, Daniel Castro & Stephen Ezell, Reflections on President Biden’s Executive Order on Competition, Info. Tech. & Innovation Found. (July 12, 2021), https://perma.cc/3X6N-QFDB (concluding that “the executive order recycles inaccurate claims made by neo-Brandeisian opponents of big business to justify their ‘predistributionist’ agenda. Again, the core economic problem is not related to too little competition, but to too little productivity”); Doug Badger, The Good, The Questionable, and the (Potentially) Ugly Health Care Policies in the Biden Competition Executive Order, Heritage Found. (Aug. 10, 2021), https://perma.cc/4QXJ-JP2Z (considering that “[t]here’s a lot to dislike in President Biden’s executive order . . . . for relying too much on regulation and too little on enhancing economic freedom”); Jeffrey Miron & Pedro Braga Soares, The Biden Executive Order and Market Power, Cato Inst.(Aug. 24, 2021), https://perma.cc/WF5X-AULE (considering that “despite a few sensible proposals, the order would reduce economic efficiency and weaken competition in some areas”). that generally targets large companies, irrespective of their merits.7See Jeff Stein, Aaron Gregg & Cat Zakrzewski, Biden’s Bid to Take on Big Business Sets Off Battle Over Who Holds Power in U.S. Economy, Wash. Post (July 9, 2021, 6:46 PM),
https://perma.cc/3CA9-D5MJ; see also Can the Federal Bureaucracy Resuscitate Market Dynamism in America?, Economist(July 15, 2021), https://perma.cc/EY26-KSWL (questioning “whether judges are willing to accept more expansive antitrust action. So far the signs are not promising”); Brent Kendall & Ryan Tracy, Biden Targets Big Business in Sweeping Executive Order to Spur Competition, Wall St. J. (July 9, 2021, 5:35 PM), https://perma.cc/2WMX-KPJF (noting that “[t]he president’s move, months in the making, comes as Democrats have made competition policy and antitrust enforcement a key part of their agenda, arguing that the federal government hasn’t done enough to preserve healthy, competitive markets”). President Biden appointed the heroes of the “New Brandeis Movement” to key offices, created a White House Competition Council, sued major companies and generated a chilling effect on all mergers, called for new rulemaking authority, embraced European-style regulations, and supported numerous antitrust bills aimed at reforming antitrust laws.8See Jim Tankersley & Cecilia Kang, Biden’s Antitrust Team Signals a Big Swing at Corporate Titans, N.Y. Times (Oct. 28, 2021), https://perma.cc/MG43-E8KA; Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (July 14, 2021).
How could a radical movement from the Progressives (known as the “New Brandeis School”) become the Democrats’ mainstream view, be endorsed by an allegedly moderate president,9Crane, supra note 3 (“Biden would be wise not to associate his administration solely with the neo-Brandeisian position. . . . [H]e should consider including reformist centrists in his antitrust slate.”). and be cheered by populist Republicans?10Lauren Feiner, Democrats and Republicans Form Odd Alliances During Tech Antitrust Debate, CNBC (June 24, 2021, 2:27 PM), https://perma.cc/CT8H-LBEX; Shira Ovide, How Klobuchar and Hawley See Things When It Comes to Technology, N.Y. Times (May 13, 2021),
https://perma.cc/47W9-N45C (noting that “[t]he senators agree that big is bad. . . . To them, the power of tech companies is emblematic of what goes wrong when big corporations are left mostly alone to do what they want. It’s weird, really, how alike they sound”). The answer undoubtedly lies in the working of politics. Presidential candidate Senator Elizabeth Warren (D-MA) personified the radical stance of populist antitrust in 2019 and was able to leverage her political power when she finally endorsed the future President Joe Biden.11Colin Lecher, Elizabeth Warren Says She Wants to Break Up Amazon, Google, and Facebook, The Verge (Mar. 8, 2019, 9:22 AM), https://perma.cc/2GHH-MSCL (noting that “[t]he proposal is the most stringent stance taken by a candidate in the presidential campaign so far”); Emily Stewart, Joe Biden Racks Up Another Big Endorsement: Elizabeth Warren, Vox (Apr. 15, 2020, 9:40 AM), https://perma.cc/2X6G-KZCA; see also Hovenkamp, supra note 1 (“Who gains from Senator Warren’s first proposal to keep large platform companies from selling their own merchandise? Not consumers or labor, both of whom benefit from high output and low prices. Indeed, the text of the Warren proposal is largely indifferent to output or pricing—and may even lead to lower output and higher prices.”). Indeed, Senator Warren was directly briefed by the leaders of the Neo-Brandeis Movement when she considered launching a 2016 bid for president:12Nik DeCosta-Klipa, Here’s Why Elizabeth Warren Didn’t Run for President in 2016, Boston (Apr. 13, 2017), https://perma.cc/M6YR-PQLB.
In early 2016, one of Warren’s advisers reached out to a Yale law student named Lina Khan. . . . In Warren, Khan and the head of Open Markets, Barry Lynn, found a high-profile figure in Washington who was willing to listen and who had the ability to draw attention to the cause. They met for dinner . . . . They suggested several anti-monopoly tools, including breaking up some of these giant companies.13Sheelah Kolhatkar, How Elizabeth Warren Came Up With a Plan to Break Up Big Tech, New Yorker (Aug. 20, 2019), https://perma.cc/VG7M-6TRY.
“[S]etting the Democratic field’s hostile tone on tech,”14Nancy Scola, Warren’s Blasts at Tech Leave Biden in the Shadows, Politico (Oct. 16, 2019, 8:58 PM), https://perma.cc/G58B-9637 (noting that “[t]he former vice president was the quietest person on stage on the question of how to handle Silicon Valley. His rivals, echoing Warren, expressed degrees of unease with [tech] companies”). Senator Warren’s populist stance on antitrust, together with Senator Bernie Sanders’s (I-VT) views, proved to be extremely influential in the definitive approach to antitrust by the Democratic candidate.15Cristiano Lima, Bernie Sanders Says He Would ‘Absolutely’ Try to Break Up Facebook, Google, Amazon, Politico (July 16, 2019, 10:41 AM), https://perma.cc/Y5F4-5KQD (noting that Bernie Sanders “would appoint an attorney general ‘who would break up these huge corporations’”); Press Release, Open Mkts. Inst., Open Markets Applauds Senator Sanders’ “Bright Line” Standards Antitrust Plank, (Oct. 14, 2019), https://perma.cc/5LGC-TKNF (noting that Barry Lynn considered that “Bernie Sanders has a simple rule. If a company is too big, it should be made smaller”). Indeed, as Senator Warren endorsed Joe Biden,16Stewart, supranote 11. Biden endorsed Warren’s populist stance on antitrust, even though this was contrary to the Obama era’s stance on antitrust when Biden was Vice President.17Jake Johnson, Progressives Demand Biden Break from Obama’s ‘FailedLeadership’ on Antitrust, Common Dreams (Mar. 23, 2021), https://perma.cc/MJ3K-4KKV; Zephyr Teachout, A Blueprint for a Trust-Busting Biden Presidency, New Republic (Dec. 18, 2020), https://perma.cc/4R8E-D64R (noting that Biden had to break with the “dismal precedent set under Biden’s former boss, Barack Obama, and suspend continued and vigorous antitrust prosecutions out of fear of industry backlash. . . . For Biden to take this path with any conviction, he’ll have to admit that Obama’s FTC and DOJ did a bad job”). On calls for President Biden to remain coherent with his centrist stance, see Crane, supra note 3. Under the influence of Senator Warren’s and friends’ stance on populist antitrust, President Biden has changed from being the “quietest” of the Democratic candidates on antitrust18Scola, supra note 14. into the kind of trust-busting president that Progressives have long idealized with Theodore Roosevelt. However, Biden does not fit with the mystified representation of Roosevelt as a trust-buster.19Robert D. Atkinson & Michael Lind, The Myth of the Roosevelt “Trustbusters,” New Republic (May 4, 2018), https://perma.cc/Y5N3-UAS4 (pointing out that “Roosevelt raged when the Supreme Court ordered the break-up of Standard Oil, in an antitrust lawsuit begun under his administration and completed under Taft”).
In playing “monopoly games,” President Biden rolled the dice of antitrust between a radical approach and a moderate approach.20Ankush Khardori, Monopoly Games, N.Y. Mag. (Jan. 23, 2022), https://perma.cc/2DEY-BH6B (noting that “[a]mong many antitrust specialists, the view was already that the work of those in the progressive-reform set is standardless and intellectually incoherent, that they pursue companies and industries they hate, like the tech industry, then backfill the legal and intellectual justifications”). The dice have spoken: Biden antitrust is nothing but the Progressives’ agenda to endorse a populist “big-is-bad” stance and to advocate for firms to be trimmed down so that none can ever exercise market power, even if such exercise benefits consumers and promotes innovation.21Portuese, supra note 5, at 232–34; Aurelien Portuese, Beyond Antitrust Populism: Towards Robust Antitrust, 40 Econ. Affs. 237, 238–39 (2020); Wright & Portuese, supra note 3, at 137–38. The first year of Biden antitrust is a year of antitrust populism, not a year of antitrust stability.22William E. Kovacic, The Roots of America’s Competition Revolution, ProMarket (Sept. 21, 2021), https://perma.cc/BX97-2B7P (distinguishing “[e]xpansionists [who] present their program as occupying a sensible, pro-enforcement middle ground between hyperactive transformationalists (‘populists’) and do-nothing (or do-little) traditionalists”). This Article characterizes this year more fundamentally with three words: assumptions, actions, and disruption.
Part I describes the underlying assumptions of the Biden antitrust approach. Part II illustrates the actions undertaken within one year of Biden antitrust. The Article concludes by pointing out the paradox of new populism that the Biden antitrust approach represents—namely, less competition and innovation in the name of preserving competition and innovation.
I. An Avalanche of Assumptions
Breaking away from the Obama period, Biden antitrust relies on a large number of controversial assumptions underpinning the Neo-Brandeisian agenda. Several assumptions justify this efficiency-decreasing Neo-Brandeisian agenda, including the beliefs that (1) market power is contradictory with competition; (2) concentration cannot generate competition; (3) prices often are anticompetitive because they are either excessive or predatory; (4) mergers are carried out for anticompetitive reasons; and (5) the current lack of competition may lead to fascism. These assumptions are essential to Biden antitrust, and yet, they are rebuttable, as the following Sections demonstrate.
A. Market Power and Competition
The first assumption is that market power reveals the lack of competition and thus should be addressed. For instance, the executive order claims that “today a small number of dominant internet platforms use their power to exclude market entrants, to extract monopoly profits, and to gather intimate personal information that they can exploit for their own advantage.”23Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,987 (July 14, 2021); see also Press Release, White House, supra note 6 (calling to fight the “rising power of large corporations in the economy”). The executive order does not so much target the abuse of market power (as one would presumably think so in an attempt to reinvigorate antitrust laws) but rather targets the mere exercise of market power by large corporations.24See Press Release, White House, supra note 6 (“The large platforms’ power gives them unfair opportunities to leg up on the small businesses that rely on them to reach customers.”). The benefits derived from large-scale enterprises (i.e., scale economies and exercise of market power) are no longer the source of fierce competition but rather the evidence of an alleged lack of competition. In that regard, the network effects of the platform business models become illustrative of unfair competition rather than the competitive goal and competitive result from entrepreneurial efforts. The executive order conveys the idea that the very competition exerted by the platform network ought to be prohibited according to Neo-Brandeisians who perceive competition from a firm exercising market power as unfair competition.25The Neo-Brandeisians’ desire to prohibit the competition exerted by the platform network is justified based on a “common carrier” principle borrowed from abandoned regulation of telecommunications and utilities. See, e.g., Lina M. Khan, The Separation of Platforms and Commerce, 119 Colum. L. Rev. 973, 1015–17 (2019) [hereinafter Khan, Separation of Platforms and Commerce] (calling for resurrecting old platform regulations when writing “[u]p until around the 1970s, a basic regulatory principle held that dominant gatekeepers should not be permitted to compete with third parties for access to the gatekeeper’s facilities. Limits on business entry for network monopolies, gatekeeper intermediaries, and other businesses deemed to have outsized control over key services were a mainstay of economic regulation”). Market power has now misguidedly become synonymous with “monopoly power.” See Amy Klobuchar, Antitrust: Taking on Monopoly Power From the Gilded Age to the Digital Age 10–11 (2021); Lina M. Khan, The Ideological Roots of America’s Market Power Problem, 127 Yale L.J.F. 960, 969 (2018) [hereinafter Khan, Ideological Roots] (calling to rethink “how economic power should be organized (decentralized and dispersed), a recognition that forms of economic power are not inevitable and instead can be restructured”).
The dystopian model of perfect competition,26Compare Joseph A. Schumpeter, Capitalism, Socialism and Democracy 106 (Routledge 2003) (1943) (arguing that “perfect competition is not only impossible but inferior, and has no title to being set up as a model of ideal efficiency”) with George J. Stigler, The Theory of Price 178–89 (4th ed. 1987) (arguing that perfect competition would produce a general competitive equilibrium optimizing the allocation of society’s resources). whereby small and numerous firms charge at a marginal cost their products so that none of them can make profits and consumers have the lowest prices, remains the ideal objective of the Neo-Brandeisian.27See, e.g., Khan, Separation of Platforms and Commerce, supra note 25, at 980 (“Rather than prohibit particular business practices, separations proscribe certain organizational structures.”); Zephyr Teachout & Lina Khan, Market Structure and Political Law: A Taxonomy of Power, 9 Duke J. Const. L. & Pub. Pol’y 38, 40 (2014) (“[S]cholars and lawmakers ought to treat a certain category of corporations (as defined by structure and size) as political organizations, and treat the rules governing those corporations as ‘political rules.’”). Biden antitrust relies on the romanticized idea of a perfectly competitive market where neither monopolies nor oligopolies operate in markets; unconcentrated markets are believed to be the source of prosperity.28Remarks on Signing an Executive Order on Promoting Competition in the American Economy and an Exchange with Reporters, 2021 Daily Comp. Pres. Doc. 1 (July 9, 2021) (“[W]hat we’ve seen over the past few decades is less competition and more concentration that holds our economy back.”). But see Carl Shapiro, Competition and Innovation: Did Arrow Hit the Bull’s Eye?, in The Rate and Direction of Inventive Activity Revisited 361, 375 (Josh Lerner & Scott Stern eds., 2012) (“The real lesson is that static measures of market structure can be poor metrics for assessing innovation competition. Framing the relationship between competition and innovation as one between product market concentration and competition is not dissimilar to the view in the 1950s and 1960s that atomistic markets were the ideal and best promote (pricing and output) competition.”).
But this alleged utopia is in fact a dystopia.29See Geoffrey Manne & Dirk Auer, Antitrust Dystopia and Antitrust Nostalgia: Alarmist Theories of Harm in Digital Markets and Their Origins, 28 Geo. Mason L. Rev. 1279, 1396–98 (2021). In such an improbable world, firms would have no ability to invest, innovate, and therefore compete.30Richard B. McKenzie & Dwight R. Lee, In Defense of Monopoly: How Market Power Fosters Creative Production 41–42 (2008) (“[P]erfect competition as a market structure would, if ever realized, be defective, assuming any rising costs at all to the achievement of a perfect state of a market.”); Aurelien Portuese, Principles of Dynamic Antitrust: Competing Through Innovation, Info. Tech & Innovation Found. (June 14, 2021), https://perma.cc/4ATR-GVXD (“Perfect competition is the enemy of good competition. Imperfect competition is the source of innovation.”). Additionally, no entrepreneurs would ever invest or create a company compelled to make no profit. Absent the entrepreneurial rents, there will not be entrepreneurs. To ignore the existential incentive of market power for entrepreneurs is, in Joseph Schumpeter’s words, to have “Hamlet without the Danish prince”—a theoretical construct intellectually seductive but practically absurd.31Schumpeter, supra note 26, at 86. And yet, there is a broad consensus to say that “[m]arket power is not per se anticompetitive” because, as Jerry Ellig and Daniel Lin write, “[f]irms with market power have potentially more resources to channel into discovering or implement innovations.”32Jerry Ellig & Daniel Lin, A Taxonomy of Dynamic Competition Theories, in Dynamic Competition and Public Policy: Technology, Innovation, and Antitrust Issues 16, 20 (Jerry Ellig ed., 2001). As the Organisation for Economic Co-Operation and Development (“OECD”) reported in 2018, “it remains the case that there are potential explanations of this economy-wide evidence that are consistent with competitive innovation creating market power, rather than a lack of competition.”33Org. Econ. Coop. & Dev. [OECD], Market Concentration, at 16–17, DAF/COMP/WD (2018)46 (Apr. 20, 2018), https://perma.cc/S6WQ-RHFQ [hereinafter OECD Paper]. Increased competition can lead to increased market power for successful companies.
Additionally, “a firm possessing market power today may have earned it through past innovation.”34Ellig & Lin, supranote 32, at 20. To remove these Schumpeterian rents is to remove any incentive to innovate and thus compete.35SeeDavid J. Teece, Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy, 15 Rsch. Pol’y 285, 285–89 (1986). Furthermore, market power enables firms to compete globally by bolstering competitiveness.36The importance of scale and the enjoyment of market power in order to compete globally has long been documented. For instance, Alfred Chandler writes that “[t]he building and managing of the modern multiunit business enterprise was, then, central to the process of modernization in the Western world. . . . Of all the new types of business organizations to be formed in the United States after 1840, none were more complex than those that integrated mass production with mass distribution. . . . They operated on a global scale.” Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business 376 (1977). Unfortunately, Biden antitrust falls into the Neo-Brandeisians’ view of attacking any sort of market power.37See, e.g., Lina Khan & Sandeep Vaheesan, Market Power and Inequality: The Antitrust Counterrevoltuion and Its Discontents, 11 Harv. L. & Pol’y Rev. 235, 244 (2017) (arguing that “[i]n contrast to shareholders and executives at businesses with market power, consumers—the victims of market power—are much more likely to be representative of society at large”); see also Robert D. Atkinson, How Progressives Have Spun Dubious Theories and Faulty Research into a Harmful New Antitrust Doctrine, Info. Tech. & Innovation Found 3 (Mar. 10, 2021), https://perma.cc/8UE3-8UF3 (noting that Neo-Brandeisians assume that “[i]n all cases, market power leads to a decrease in economic welfare. There is no need to evaluate each case on its merits”). The Biden Administration writes that:
When past presidents faced similar threats from growing corporate power, they took bold action. In the early 1900s, Teddy Roosevelt’s Administration broke up the trusts controlling the economy—Standard Oil, J.P. Morgan’s railroads, and others—giving the little guy a fighting chance.38Press Release, White House, supranote 5.
Not only is this inaccurate regarding Standard Oil, but this statement reveals that the protection of the “little guy” suggests fighting any company exerting some forms of market power. Moreover, President Biden’s Executive Order on Competition states that “[t]his order affirms that it is the policy of my Administration to enforce the antitrust laws to combat the excessive concentration of industry, [and] the abuses of market power.”39Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,988 (July 14, 2021). But since current antitrust laws already prohibit abuses of market power, the abuses referred to in the executive order must be of different nature than those already prohibited under current antitrust laws. In fact, the White House explained that the executive order “launches a whole-of-government effort to combat growing market power in the U.S. economy by seeking to ensure that markets are competitive.”40Heather Boushey & Helen Knudsen, The Importance of Competition for the American Economy, White House: Blog (July 9, 2021), https://perma.cc/V33E-JJAF. The White House claims that “market-specific studies show that consolidation has led to harmful price increases, providing one of the clearest indicators of enhanced market power.”41Id.
However, this claim is unsubstantiated and, if ever demonstrated, conflates price increase with market power, thereby ignoring cost increases, quality increases, innovative efforts, and other technological improvements justifying price increases. Price competition is crippled compared to disruptive competition (or innovation-driven competition).42Richard J. Gilbert, Innovation Matters: Competition Policy for the High-Technology Economy 13 (2020) (“For firms in the high-technology economy, it is critical that competition policy consider likely effects on innovation incentives, in addition to the traditional policy focus on conduct that may raise prices.”); J. Gregory Sidak & David J. Teece, Dynamic Competition in Antitrust Law, 5 J. Competition L. & Econ. 581, 600 (2009) (“Promoting dynamic competition may well mean recognizing that competitive conduct may involve holding short-run price competition in abeyance.”); Portuese, supra note 30, at 6 (“Competition increasingly takes place on quality more than merely on price.”). Any discrepancy between marginal cost and marginal price, thus generating market power in perfect competition models, should be tackled according to the prevailing view in the Biden Administration. Such policy would preclude any innovations since the ability to generate profit represent the source of innovation and competition.
B. Concentration and Competition
The second assumption is that markets have consolidated, again illustrating the lack of competition. Indeed, the executive order states that “over the last several decades, as industries have consolidated, competition has weakened in too many markets, denying Americans the benefits of an open economy and widening racial, income, and wealth inequality.”43Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,987 (July 14, 2021). According to Neo-Brandeisians, consolidation is synonymous with reduced competition, itself leading to stifled innovation.44See Kahn, Ideological Roots, supra note 25, at 960–61. Both claims that consolidation has increased and that consolidation is tantamount to reduced competition prove inaccurate in light of theoretical discussion and empirical evidence.45The theoretical rebuttal that concentration illustrates decreased competition is discussed in the OECD paper on market competition. OECD Paper, supra note 33, at 5 (“[I]n order to reach any conclusion on whether there has been a change in competitive intensity across an industry or an entire economy requires us to look beyond concentration measures, and to consider whether other imperfect indicators of competitive intensity are telling the same story.”).
First, consolidation has not increased when the latest data is analyzed. From 2002 to 2017, the American economy has consolidated by just one percentage point (from 34% to 35%) when analyzing the share of sales accounting by the top 4 firms in industries (i.e., the C4 ratio).46Robert D. Atkinson & Filipe Lage de Sousa, No, Monopoly Has Not Grown, Info. Tech & Innovation Found (June 2021), https://perma.cc/CH79-HVHQ (noting that “[t]he concentration of the eight largest firms (C8) increased even less, from 44.1 to 44.7 percent”). Monopoly has not grown, and consolidation remains over the last few decades stagnant, contrary to the Biden Administration’s claims.47Id. The Chair of the Federal Trade Commission (“FTC”), Lina Khan, also argued that “[e]vidence suggests that decades of mergers have been a key driver of consolidation across industries, with this latest merger wave threatening to concentrate our markets further yet.”48Lina M. Khan, Chair, FTC, Remarks of Chair Lina M. Khan Regarding the Request for Information on Merger Enforcement (Jan. 18, 2022). Unfortunately, she fails to provide such evidence other than citing President Biden’s executive order, which does not provide evidence but states the same unsubstantiated claim. Instead, concentration has not increased, as demonstrated in the report published by NERA Consulting Group: “There is no general trend towards increasing industrial concentration in the U.S. economy from 2002 to 2017,” wrote the report’s authors, Robert Kulick and Andrew Card.49Robert Kulick & Andrew Card, Industrial Concentration in the United States: 2002-2017, NERA Econ. Consulting (Mar. 2022), https://perma.cc/J6RB-4T3W(noting that “[t]he evidence does not support the claim that rising industrial concentration is generally associated with poor economic outcomes” but rather that “[i]ncreases in industrial concentration are associated with output growth, job creation, and higher employee compensation”).
Second, not only has concentration not increased, but if concentration does increase, it is necessary to emphasize that concentration often proceeds from necessary corporate consolidations to benefit consumers and innovation.50Joshua D. Wright, Elyse Dorsey, Jonathan Klick & Jan M. Rybnicek, Requiem for a Paradox: The Dubious Rise and Inevitable Fall of Hipster Antitrust, 51 Ariz. St. L.J. 293, 318 (2019) (“[A]n increase in concentration alone might be the result of more competition, less competition, or the product of factors completely unrelated to competition in the economy.”). The OECD wrote in 2018 that “even where there is evidence to suggest an increase in concentration, in the absence of evidence on the movements of other indicators it is extremely difficult to draw any conclusion on whether there has been a change in competitive intensity or not.”51OECD Paper, supra note 33, at 10. Indeed, the scale and scope economies are inherent efficiencies that enable firms to reap the benefits of distributional advantages necessary to offer low prices to consumers and invest and innovate dynamically.52Philip G. Gayle, Market Concentration and Innovation: New Empirical Evidence on the Schumpeterian Hypothesis 26 (Kan. State Univ., Working Paper No. 01-14, 2001) (finding that “a more concentrated industry stimulates innovation”). This market concentration is in fact corporate rationalization as seminally explained by the historian Alfred Chandler. The modern industrial enterprise
permitted rationalization of facilities and personnel (that is, the concentration of production in a small number of large plants of optimal size), the consolidation or creation of nationwide sales forces, and the recruitment of a managerial hierarchy to operate and plan for the enterprise as a whole. . . . One of the very first enterprises to follow this path was, of course, John D. Rockefeller’s Standard Oil Trust, which had come into being in 1882 to achieve the same ends, seven years before the New Jersey laws made the formation of holding companies easy.53Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism 73 (1990).
However, the key adviser to President Biden on antitrust, Tim Wu, believes that “the broader goals of enforcement should be animated by a concern that too much concentrated economic power will translate into too much political power, and thereby threaten the Constitutional structure.”54Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age 55 (2018). This gross confusion between economic concentration to generate efficient consolidations and political concentration as dictatorship is bewildering.55Id. Not only have markets not concentrated over the last two decades, but if concentration does take place, these corporate consolidations often generate increased rationalization for the benefit of consumers and innovation, thus promoting, and not undermining, competition.56Wright et al., supra note 50, at 318–19.
But instead of acknowledging the complex relationship between concentration and competition, the Biden Administration unequivocally endorsed the Neo-Brandeisian view that the protection of small (and legacy) businesses would increase competition, thereby amounting to competition to the protection of competitors facing disruption. For instance, on January 3, 2022, when presenting his plan for “increase[ing] competition and reducing prices in the meat-processing industry,” President Biden condemned mere oligopolistic markets and committed to defending small businesses irrespective of their efficiencies when he said:
Four big corporations control more than half the markets in beef, pork, and poultry. . . . Small, independent farmers and ranchers are being driven out of business—sometimes businesses that have been around for generations. It strikes at their dignity, their respect, and the family legacies so many of them carry for generations after generation.57Remarks in a Virtual Meeting with Family and Independent Farmers and Ranchers on Efforts To Increase Competition and Reduce Prices in the Meat-Processing Industry and an Exchange With Reporters, 2022 Daily Comp. Pres. Doc. 1 (Jan. 3, 2022); see also Press Release, White House, Fact Sheet: The Biden-Harris Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain (Jan. 3, 2022), https://perma.cc/2J37-CQEA.
An oligopolistic market has widely been considered as the best market structure to incentivize innovation and to ensure competition. Indeed, building on Schumpeterian insights, Keith Hylton notes that “[t]he prospect of earning large, temporary profits generates efforts to innovate. Successful innovation leads to large profits. Take away or reduce the size of profits, and you will see less innovation, and less entry.”58Keith N. Hylton, Antitrust Law: Economic Theory & Common Law Evolution 20 (2003). In other words, a perfectly competitive market disincentivizes innovation, preventing the very competitive process. Consequently, while fighting concentration at all costs, Biden antitrust ignores the reality that concentration is inherent to the competitive process it pretends to preserve.
C. Prices and Competition
The third assumption is that prices are too high, therefore enabling companies to profit from the alleged lack of competition.59Remarks on Prescription Drug Costs and an Exchange With Reporters, 2021 Daily Comp. Pres. Doc. 1028 (Dec. 6, 2021) (lamenting prescription drug prices without acknowledging pharmaceutical innovation); see also Stephen Ezell, Ensuring U.S. Biopharmaceutical Competitiveness, Info. Tech & Innovation Found(July 2020), https://perma.cc/BS8H-65PX (“On average, of the top-25 biopharmaceutical R&D-investing companies in the study, American firms averaged an R&D intensity of 25.2 percent, Japanese firms 18.1 percent, and European firms 15.5 percent.”); Joe Kennedy, The Link Between Drug Prices and Research on the Next Generation of Cures, Info. Tech & Innovation Found (Sept. 2019), https://perma.cc/S7W4-JFSR (“When countries intervene to set a cap on drug prices, as Europe did in the 1980s, research and innovation suffer. Moreover, firms are unlikely to invest in future research unless they believe doing so will be profitable.”). The Biden Administration has conveyed the idea that the American economy faces too high prices because of the lack of competition. For instance, the executive order aims to offer “lower prices” for consumers, lamenting from “price gouging” to high prices for flight options and drugs.60Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,997 (July 9, 2021). Before delving into the assumption that current prices reflect a lack of competition, Biden antitrust has its fundamental paradox: it decries the consumer welfare standard as a “failed experiment” over the last few decades, which focused on lower prices.61Remarks on Signing an Executive Order on Promoting Competition in the American Economy and an Exchange with Reporters, 2021 Daily Comp. Pres. Doc. 576 (July 9, 2021) (“We’re now 40 years into the experiment of letting giant corporations accumulate more and more power. . . . I believe the experiment failed.”). In other words, President Biden endorses the Neo-Brandeisians’ contradiction to get good riddance of a standard that ensured low prices in the name of lower prices.62See Chandler, supra note 53, at 71.
This assumption is paradoxical in many respects. First, larger firms tend to charge lower prices, thanks to scale economies. To endorse the populist “big-is-bad” motto of the Neo-Brandeisians proves fundamentally contradictory for the Biden Administration. Alfred Chandler has historically demonstrated that the assumption that larger firms charge higher prices is untrue.63Id. at 71–72. Large-scale enterprises reap the benefits of scale economies, thereby competing on innovation but also on lower prices.64Id. Indeed, “[i]ncreasing output and overcapacity intensified competition and drove down prices. Indeed, the resulting decline of prices in manufactured goods characterized the economies of the United States and the nations of western Europe from the mid-1870s to the end of the century.”65Id. at 71.
Today’s industrial giants follow this historically robust trend: they offer extremely competitive prices—if not zero-priced products66Org. Econ. Coop. & Dev. [OECD], Quality Considerations in Digital Zero-Price Markets, at 14, DAF/COMP(2018)14 (Oct. 9, 2018) [hereinafter OECD Background Note],
https://perma.cc/4VMJ-MYE9; see also Makan Delrahim, Assistant Att’y Gen., U.S. Dep’t of Just., Remarks as Prepared for Delivery at Silicon Flatirons, University of Colorado Law School (Feb. 11, 2019) (noticing that “[z]ero-price strategies have exploded in the digital economy, driven in large part by the Internet’s decreased production and distribution costs and the increase of digital platforms characterized by network effects and economies of scale”).—or even negative prices where consumers become “prosumers”67Alvin Toffler, The Third Wave 11 (1980) (coining the term “prosumer”); see also George Ritzer, Paul Dean & Nathan Jurgenson, The Coming of Age of the Prosumer, 56 Am. Behav. Scientist 379 (2012); George Ritzer, Prosumer Capitalism, 56 Socio. Q. 413, 415 (2015) (arguing that “[w]hile prosumption is ubiquitous in contemporary capitalism (as it has been at all times and in all economic systems), it is its crucial importance and its centrality on the Internet, as well as its connection to the material world, that is serving to elevate it from obscurity.”). and generate earnings from consumption. As the OECD notes, “in the digital economy, new zero-price markets have arisen with their own unique characteristics and vast scope: seven of the ten largest global companies provide zero-price products and services in digital markets.”68OECD Background Note, supra note 66, at 4. Unfortunately, the Biden Administration agrees with “competition enforcers—who operate based on neoclassical economics—[that] free is a suspicious price.”69Friso Bostoen, Online Platforms and Pricing: Adapting Abuse of Dominance Assessments to the Economic Reality of Free Products, 35 Comput. L. & Sec. Rev. 263, 280 (2019) (emphasis omitted) (arguing for a methodological update of competition because “[i]t is no exaggeration to say that free is the preferred price for online services—a price that finds its roots in two-sided market theory or freemium models”). On two-sided markets, see Jean-Charles Rochet & Jean Tirole, Platform Competition in Two-Sided Markets, 1 J. Eur. Econ. Ass’n 990 (2003); David S. Evans & Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms 93 (2016) (suggesting multi-sided platforms “can make more profit by deciding to lose money on one side” depending on the tilt of the price structure). On the antitrust implications of the zero-priced markets, see David S. Evans, The Antitrust Economics of Free, 7 Competition Pol’y Int’l 71, 73–77 (2011); John M. Newman, Antitrust in Zero-Price Markets: Foundations, 164 U. Pa. L. Rev. 149 (2015); Michal S. Gal & Daniel L. Rubinfeld, The Hidden Costs of Free Goods: Implications for Antitrust Enforcement, 80 Antitrust L.J. 521 (2016). The administration’s desire to protect small businesses hardly accommodates disruptive competition on prices that benefit consumers.
Second, prominent figures of the populist view of antitrust nominated in critical positions in the Biden Administration have lamented against low prices, thereby advocating a departure from the long-standing consumer welfare standard. For instance, FTC Chair Lina Khan complained against Amazon’s low prices and labeled these prices, without evidence of below-cost pricing, as “predatory prices.”70Lina M. Khan, Amazon’s Antitrust Paradox, 126 Yale L.J. 710, 753 (2017) (claiming that “Amazon’s strategy has enabled it to use predatory pricing tactics without triggering the scrutiny of predatory pricing laws”). Paradoxically, Neo-Brandeisians simultaneously claim that Amazon charges too low prices and too high prices, although without convincing the courts. See John D. McKinnon, Amazon Wins Dismissal of D.C. Antitrust Lawsuit Over Pricing, Wall St. J. (Mar. 18, 2022), https://perma.cc/XF5M-W4R4 (dismissing a case alleging that Amazon has artificially imposed high prices on third-party vendors). This accusation ignores the fact that the Supreme Court judged that “predatory pricing” can nevertheless have welfare-increasing consequences on the economy.71Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 210 (1993) (“Without recoupment, even if predatory pricing causes the target painful losses, it produces lower aggregate prices in the market, and consumer welfare is enhanced.”). Be that as it may, the Neo-Brandeisians cannot coherently have it both ways. The bigness of companies cannot be simultaneously claimed as the source of high prices and low prices. A more reasonable account of the market realities would lead one to conclude that large companies can charge low prices due to scaling economies, but they can also charge higher prices to fund research and innovation efforts, thereby departing from the textbook model of marginal prices charged at marginal costs.
More generally, the disruption that large-scale, technologically savvy enterprises exert on small businesses creates excessive price competition, not low price competition. When Neo-Brandeisians lament low price competition, they in fact lament extreme price competition. For example, in the case of Uber, small taxi drivers best illustrate the claim that what appears to be insufficient price competition is in fact disruptive price competition enabled through technological innovation.72Compare Judd Cramer & Alan B. Krueger, Disruptive Change in the Taxi Business: The Case of Uber, 106 Am. Econ. Rev. 177 (2016), and Ruth Berins Collier, V.B. Dubal & Christopher L. Carter, Disrupting Regulation, Regulating Disruption: The Politics of Uber in the United States, 16 Persps. on Pol. 919 (2018), with Keyawna Griffith, The Uber Loophole That Protects Surge Pricing, 26 Va. J. Soc. Pol’y & L. 34, 63 (2019) (arguing that “Uber’s current surge pricing method should be illegal”), and Tina Bellon, Uber Customer Claims Company Won Price-Fixing Suit Because Arbitrator Was Scared, Reuters (May 22, 2020, 6:34 PM), https://perma.cc/A3FY-4TZS, and J. Edward Moreno, Judge Upholds Uber Arbitration Win in Price-Fixing Case, The Hill (Aug. 4, 2020, 9:53 AM), https://perma.cc/EB6C-9L9M.
D. Mergers and Competition
The fourth assumption is that mergers are inherently bad as they consolidate markets, which itself reduces competition. The Neo-Brandeisians’ mentor, Senator Warren, introduced a bill that would ban all mergers worth more than $5 billion, irrespective of efficiency considerations and stripping merger litigation from the appellate jurisdiction of the Supreme Court in what could be an unconstitutional reform proposal.73Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. (2022); see also Maureen Breslin, Warren Leads Bill to Ban Mergers Worth More Than $5 Billion, The Hill (Mar. 18, 2022, 7:57 AM), https://perma.cc/882V-M8NV. In their radical proposals, Neo-Brandeisians want to ban all large mergers,74Robert H. Lande & Sandeep Vaheesan, Ban All Big Mergers. Period., The Atlantic (Feb. 25, 2021), https://perma.cc/6CQV-LBVN (arguing that “[a] ban on megamergers would reduce the amount of money and human energy currently wasted in putting together unproductive consolidations”). thus undermining one of the key fundamentals of dynamism in capitalist society.75See Schumpeter, supra note 26, at 106. See generally Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (1939).
Indeed, President Biden argued that “[t]oo many companies have pursued corporate conduct and more aggressive mergers that have made all of us vulnerable. Against this background, our antitrust efforts cannot and will not slow down.”76Press Release, White House, Remarks by President Biden During a Virtual Meeting to Discuss Boosting Competition and Reducing Prices in the Meat-Processing Industry (Jan. 3, 2022). However, the claim that mergers have reached an unprecedented and unexplainable level proves erroneous.77Info. Tech. & Innovation Found., Comment Letter on Request for Information on Merger Enforcement (Mar. 21, 2021) [hereinafter ITIF Comment on Merger Enforcement], https://perma.cc/YYZ8-ZYXY(demonstrating that “the current merger wave is neither unprecedented nor sustainable: It is a well-anticipated response to an economic crisis. The pattern is well-known and unsurprising.” (footnotes omitted)). The merger wave generated by the COVID-19 pandemic was largely predictable; see Chokri Kooli & Melanie Lock Son, Impact of COVID-19 on Mergers, Acquisitions & Corporate Restructurings, 2021 Businesses 102, 111 (noting that “[c]ompared to the 2008 economic downturn where there was a lack of liquidity on the markets, in 2021 we can expect the M&A market to continue on this momentum, as debt and equity financing are readily available and low-interest rates prevail across the globe”); see also Aurelien Portuese, Reforming Merger Reviews to Preserve Creative Destruction, Info. Tech & Innovation Found. 10 (Sept. 2021), https://perma.cc/K728-ET54(demonstrating that “[m]erger enforcement actions grew steadily from 1979 to 2017, albeit with an unprecedented and sudden rise during the Clinton administration”); Jeffrey T. Macher & John W. Mayo, The Evolution of Merger Enforcement Intensity: What Do the Data Show?, 17 J. Competition L. & Econ. 708 (2021). Biden antitrust put “corporate America on notice” because of anticipated aggressive merger enforcement.78Nicole Goodkind, Biden’s Merger Watchdogs Just Put Corporate America on Notice—50 Years of Allowing Bigger and Bigger Monopolies Are Ending Soon, Fortune (Jan. 19, 2022, 1:34 PM), https://perma.cc/QV5P-XDN3.
The most significant wave of mergers, which occurred in the early 1900s, has demonstrated greater efficiencies and innovations and enabled America to generate the large-scale, efficient “modern industrial enterprises,” as Alfred Chandler calls them.79Chandler, supra note 53, at 14. Chandler adds that in the years during the merger movement from the turn of the century to the nation’s entry into World War I,
the successful mergers had made their shift from a holding company of previously competing firms to an operating company that integrated volume production and distribution, and so took advantage of the economies of scale. At the same time, the few combinations that continued to operate old, outmoded, poorly located plants or did not build new ones that were close to optimal size failed to grow and usually failed to make as satisfactory a return on their invested capital.80Id. at 78.
Furthermore, the claim that merger enforcement has become tremendously lax is not supported. In fact, evidence reveals that merger enforcement intensity has remained relatively stable over the years.81Portuese, supra note 77, at 10 (noting that “[a]ntitrust agencies have not fundamentally reduced merger control over the last decade; and recent studies also demonstrate that there is no under-enforcement in merger policy”); ITIF Comment on Merger Enforcement, supra note 77. The Biden Administration incentivizes antitrust agencies to adopt a more aggressive merger policy because of an unsupported lax merger policy. Indeed, the executive order calls for agencies to “address the consolidation of the industry in many markets across the economy” and encourage antitrust agencies to “review the horizontal and vertical merger guidelines and consider whether to revise those guidelines.”82Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,991 (July 14, 2021).
Despite being adopted recently and being widely accepted as adequate, the antitrust agencies have engaged in the process of revising guidelines.83U.S. Dep’t of Just. & Fed. Trade Comm’n, Vertical Merger Guidelines (2020); U.S. Dep’t of Just. & Fed. Trade Comm’n, Horizontal Merger Guidelines (2020). See generally ITIF Comment on Merger Enforcement, supranote 77. The FTC unilaterally rescinded the 2020 Vertical Merger Guidelines and generated considerable legal uncertainty for mergers when it declared that firms might complete acquisitions at their own perils, thereby threatening to subsequently unwind consummated mergers.84Press Release, Fed. Trade Comm’n, Federal Trade Commission Withdraws Vertical Merger Guidelines and Commentary (Sept. 15, 2021), https://perma.cc/EU5R-LD84. The aggressive stance on mergers assumes that mergers are detrimental to the economy, that merger-specific efficiencies never materialize, and that mergers undermine innovation without propelling it. This peculiar view of mergers remains unsubstantiated, suggesting a risk of false positives in blocking pro-innovation and efficiency-enhancing mergers.
E. Democracy and Competition
The fifth assumption is that because smaller firms innovate more and represent economic democracy, competition policy should attack the big and insulate the small from competitive pressures. Large companies (i.e., “monopolies” in Neo-Brandeisian parlance) allegedly threaten economic democracy.85Khan, Ideological Roots, supra note 25, at 966 (claiming that “excessive consolidation could deliver fascism”).
President Biden’s executive order conveys the assumption that “excessive market concentration threatens basic economic liberties [and] democratic accountability.”86Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,987 (July 14, 2021). This assumption lies at the heart of the Neo-Brandeisian claim.87Greg Ip, Antitrust’s New Mission: Preserving Democracy, Not Efficiency, Wall St. J. (July 7, 2021, 11:07 AM), https://perma.cc/6KYP-U387 (“Neo-Brandeisians like FTC Chairwoman Lina Khan target concentrated economic and political power.”). Indeed, the populist fear asserts that corporate bigness irremediably leads to political corruption and fascism.88See Tim Wu, Opinion, Be Afraid of Economic ‘Bigness.’ Be Very Afraid., N.Y. Times (Nov. 10, 2018) (claiming that “[i]n the 1930s [economic bigness] contributed to the rise of fascism”); Lina M. Khan, The End of Antitrust History Revisited, 133 Harv. L. Rev. 1655, 1660 (2020) (reviewing Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age (2018)) (“A striking corollary to the idea that extreme economic concentration undermines personal and political liberty is that it can also facilitate the rise of fascism.”). This assumption remains unsubstantiated. Instead, it represents a gross confusion between correlation and causation: economic concentration never leads to fascism, but rather fascism leads to economic concentration.89See Daniel A. Crane, Fascism and Monopoly, 118 Mich. L. Rev. 1315, 1353 (2020). Economic history demonstrates that the causation is reverse to what Neo-Brandeisians claim. Very large corporations since the Gilded Age never turned America into a fascist or totalitarian country.
Fascism in Germany and Italy led to a reorganization of small businesses into trade associations and trusts to facilitate state authoritarianism.90See Benno Nietzel, Nazi Economic Policy, Middle-Class Protection and the Liquidation of Jewish Businesses 1933-1939, in National Economies: Volks-Wirtschaft, Racism and Economy in Europe Between the Wars (1918-1939/45) 108, 110 (Christoph Kreutzmuller, Michael Wildt & Moshe Zimmermann eds., 2015). Paradoxically, Neo-Brandeisians advocate for antitrust exemptions for small businesses and their reorganization into trade groups, which precisely contribute to the rise of Big Government through socialist planning.91See, e.g., Jennifer Szalai, A Look at Competition in Business Urges Us to Think Small, N.Y. Times (Dec. 12, 2018), https://perma.cc/8BNV-ESG6. As Alfred Chandler documents, corporations were much larger in the United States than in Germany until World War II, at a time when the Nazi regime struck down large German corporations:
From 1890s on, the United States was the world’s leading industrial nation . By 1913 it was producing 36% of the world’s industrial output as compared with Germany’s 16% and Britain’s 14%. As a consequence there have always been a greater number of large modern industrial enterprises in the United States than in any other nation . . . . A rough estimate indicates that before World War II only about a quarter of the 200 largest industrial enterprises in Britain and even less than a quarter in Germany . . . had assets greater than those of the 200th largest American firm. In addition, because many of these American firms quickly expanded abroad, they played from the start a major role in global competition, even though their managers concentrated on the home market.92Chandler, supra note 53, at 47.
In other words, America’s economy was populated with the greatest number of the largest firms who concentrated domestically to compete globally. Large-scale corporations pioneered the new “managerial capitalism” that enabled American firms to expand and compete globally.93See generally Alfred D. Chandler, Jr., The Emergence of Managerial Capitalism, 58 Bus. Hist. Rev. 473 (1984). And contrary to the Neo-Brandeisian’s false claim, the Nazi regime halted the growth of large corporations in Germany to impose a fascist control over the economy:
Thus by World War II managerial capitalism had become firmly established in the United States in the industries where the modern industrial enterprise has clustered ever since. This was less evident elsewhere. In Germany families, large investors, and banks continued to play a more influential role, at least until the coming of the Nazi regime.94Chandler, supra note 53, at 49.
The Nazi regime interrupted the few large institutions capable of financing corporate growth and installed a state-control model of trusts and trade groups at the expense of the natural growth of private enterprises.95See generally Heinrich August Winkler, From Social Protectionism to National Socialism: The German Small-Business Movement in Comparative Perspective, 48 J. Mod. Hist. 1 (1976). The Nazi regime inherited an economy made of small companies, not large companies.96Id.at 1–2. Nazism flourished based on the Mittelstand, a group of stable small businesses that represented 8 million Germans.97Id. at 9. The Nazi party (“NSDAP”) was designed to protect small businesses from competition.98Id. at 10. It is unquestionable that “[d]uring the 1920s, craftsmen and small shopkeepers were greatly overrepresented among NSDAP members.”99Nietzel, supra note 90, at 110. In fact, the party “called for the protection of a ‘healthy middle-class’ (Mittelstand) [and] the municipalization of large department stores.”100Id.
As Nazis wanted “the protection of small and middle-sized trade businesses from competition,” it is thus unsurprising that
one of the first laws that the Hitler government enacted after it acquired absolute power dealt with the cause of the retailers. The “law for the protection of the German retail trade”, enacted on May 12, 1933, set out to ban the opening of any new retail shops. An additional decree ordered all handicraft businesses that operated inside department stores to close down. . . . Contrary to its initial promises, the Hitler government shied away from closing down existing department stores, thus leaving one of the pivotal demands of small retailers unfulfilled.101Id. at 111–12 (footnote omitted).
Consequently, even though government intervention did not go as far as small independent retailers wanted regarding the assault on department stores, the Nazi party, and then Hitler’s government, clearly relied on a strong popular basis. The government insulated small businesses from the competition while closing down larger businesses.102Frank B. Tipton, Jr., Small Business and the Rise of Hitler: A Review Article, 53 Bus. Hist. Rev. 235, 235 (1979) (noting that “many scholars have identified German small business as a crucial source of support for the Nazi seizure of power”). Big business was not the root of Hitler’s rise to power; widespread xenophobia and antisemitism was.103See generally Henry Ashby Turner, Jr., Big Business and the Rise of Hitler, 75 Am. Hist. Rev. 56 (1969). If big business later donated money to the NSDAP, it was to obtain economic protection after failed resistance, rather than support an ideological endorsement.104See, e.g., Crane, supranote 89, at 1342–43 (noting that “Farben initially resisted Nazification, worried about potential ill effects on its global business of becoming overly intertwined with a controversial political party. However, by the mid-1930s, the firm’s management had acceded to the reality that alliance with the Nazis was critical to the continued success of the Farben enterprise” (footnote omitted)). Big business had to cooperate with the Nazi regime to avoid being nationalized. Big business did not provide major financial support to the Nazis as demonstrated seminally in Michael D’Antonio, Before the Storm: German Big Business and the Rise of the NSDAP 38–39 (Spring 2016) (Honors Degree thesis, University of Delaware), https://perma.cc/D3GR-MBFM (noting that “Hitler, however, was a shrewd politician, and he recognized that the most important factor in the NSDAP rise to political power was votes, not financial backing. Such support did not include industrialists, who were a small and closely guarded group, but, rather, a grassroots base of voters”).
The Neo-Brandeisian’s myth of Nazism as an opponent to small businesses and the defender of big companies cannot be further from the truth. Hitler municipalized and nationalized large businesses while overly protecting small businesses from competition.105Nietzel, supra note 90, at 109–10. The Nazis controlled and nationalized companies because of the “total mobilization” that war required, a concept also relied upon in the United States, which suspended antitrust rules during wartime.106Christoph Kreutzmuller, Introduction to National Economies: Volks-Wirtschaft, Racism and Economy in Europe Between the Wars (1918-1939/45) 4 (Christoph Kreutzmuller, Michael Wildt & Moshe Zimmermann eds., 2015); see also Barak Orbach, How America Turns Competitors into Colleagues, Regul. Rev. (May 18, 2021), https://perma.cc/5ASF-RNUU. Again, fascism led to nationalized, large conglomerates and not the reverse. As Daniel Crane aptly notes, “[t]he idea that concentrated economic power breeds concentrated political power has much rhetorical appeal, but documenting the relationship historically, exploring the variations and mechanisms, and prescribing the particular antidotes remains a largely incomplete project.”107Crane, supra note 89, at 1370. The lack of causation from big businesses to fascism appears clear with benchmark models. Indeed, fascism in Japan and in Italy further demonstrate that fascism emerges from an economy populated with small firms, not with large firms—namely, zaibatsu in Japanese economy108Randall K. Morck & Masao Nakamura, A Frog in a Well Knows Nothing of the Ocean: A History of Corporate Ownership in Japan, in A History of Corporate Governance Around the World: Family Business Groups to Professional Managers 367, 398 (Randall K. Morck ed., 2005) (noting that “[t]here were many family-based zaibatsu groups in many localities in Japan before World War II. The scale of their business operations and geographic coverage was much smaller than that of the major zaibatsu groups such as Mitsui, Sumitomo, and Mitsubishi”). The Japanese roots of fascism have been identified in the “small factory owners, building contractors, proprietors of retail shops, master carpenters, small landowners, independent farmers, school teachers (especially in primary schools), employees of village offices, low-grade officials, Buddhist and Shinto priests.” Masao Maruyama, The Ideology and Dynamics of Japanese Fascism, in Thought and Behavior in Modern Japanese Politics 25, 57 (1969); see also O. Tanin & E. Yohan, Militarism and Fascism in Japan 272 (1934) (explaining that Japanese fascism emerged from “the reactionary chauvinist organizations among the intermediate social strata, principally small landed proprietors and the urban petty bourgeoisie” which was “in its ideology, closer to West European fascism”(emphases omitted)). and corporazioni in Italy.109Benito Mussolini made clear that the fascist society would emerge from a corporative system unified under the State: “Fascism recognizes the real needs which gave rise to socialism and trade-unionism, giving them due weight in the guild or corporative system in which divergent interests are co-ordinated and harmonised in the unity of the State.” Benito Mussolini, Fascism: Doctrine and Institutions, in Mediterranean Fascism 1919-1945, at 91, 94 (Charles F. Delzell ed., trans., Harper & Row Publishers 1970). Mussolini further admitted that “[i]t may be objected against this program that it is a return to the conception of the corporation, but that is no matter. . . . Therefore, I desire that this assembly shall accept the revindication of national trade-unionism . . . . Now is it not a singular thing that even on the very first day in the Piazza San Sepolcro that word ‘corporation’ arose, which later, in the course of the Revolution, came to express one of the creations of social legislation at the very foundation of the régime?” Id. at 97–98.
The Neo-Brandeisian reference to weaponizing fascism and Nazism to promote a misguided agenda amounts to Godwin’s law110The Godwin’s law of Nazi analogies, named after Mike Godwin, an American attorney and writer, states that “as an online discussion continues, the probability of a reference or comparison to Hitler or Nazis approaches 1.” Abby Ohlheiser, The Creator of Godwin’s Law Explains Why Some Nazi Comparisons Don’t Break His Famous Internet Rule, Wash. Post (Aug. 14, 2017, 4:28 PM), https://perma.cc/W76G-SAHL. In other words, individuals resort to Nazi references in order to win an argument. Id. The moment a debater glibly calls his or her opponent a “Nazi” or resorts to “Nazi policy” demonstrates Godwin’s law. Id. in antitrust: it is a prolonged discussion in search of thought-terminating clichés. Bigness never caused fascism. But, fascism always protected small businesses and nationalized few companies. It is historically evident that “[t]he fundamental, distinguishing factor in fascism is its economic program, which aims at rehabilitating the middle class.”111E. Francis Brown, The American Road to Fascism, 38 Current Hist. 392, 392 (1933). The Biden Administration’s decision to impute Neo-Brandeisians’ gross historical mistakes about the stance of Nazism and fascism on small businesses is regrettable, especially when it proves to be a major assumption stated in the first sentence of an executive order on competition. “[E]xcessive market concentration” does not threaten “basic economic liberties[and] democratic accountability.”112Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,987 (July 14, 2021). Rather, market concentration is probably one of the reasons behind the absence of fascist government in American history, as opposed to European and Japanese histories.113See, e.g., Alec Stapp, Tim Wu’s Bad History: Big Business and the Rise of Fascism, Niskanen Ctr. (Mar. 11, 2019), https://perma.cc/8JBY-LE6C (noting that big businesses donated to Hillary Clinton rather than the allegedly more authoritarian presidential candidate, Donald Trump, in the 2016 election).
However, this mistake is unsurprising since Tim Wu, who helped draft the executive order, has repeatedly and baselessly claimed that concentration led to fascism and that today’s economy is “ripe for dictatorship.”114Wu, supra note 88 (assuming that “[t]here is a direct link between concentration and the distortion of democratic process”). But see Stapp, supra note 113(concluding that “Hitler’s rise to power began in September 1919. He was either ignored or actively opposed by most of the leading industrialists until after he was appointed chancellor on January 30, 1933”). Neo-Brandeisian’s assumptions and mistakes on economic history pervaded the economic order on competition and can thus only lead to unintended consequences due to incorrect analysis. Paradoxically, Neo-Brandeisians’ bias toward small businesses and advocacy for Big Government’s control over the way firms compete ironically bear resemblances with the economic program of fascism.115Brown, supra note 111, at 392 (noting that “[a]wakened by its painful experiences since the World War to the evils of unrestrained competition and uncontrolled production which seems to be characteristic of the capitalistic system, the middle class has sought to escape its troubles through economic planning within a self-sufficing State”).
These assumptions inherently underpin the Neo-Brandeisian agenda supporting Biden antitrust. Contrary to professor Crane’s advice that President Biden should not tie himself to Neo-Brandeisianism,116Crane, supra note 3. the President has tied himself to the controversial fringe of antitrust radicals on the assumptions they convey.117On how Neo-Brandeisianism ignores Schumpeterian competition, see Richard N. Langlois, Potential Competition as Process and Structure, Competition Pol’y Int’l Antitrust Chron., Feb. 2022, at 1, 4 (“As happened in the twentieth century, market segmentation would ultimately end up protecting incumbents from the genuinely new. Schumpeterian competition is not about maintaining the structure of competition. It is about destroying and replacing it. Some Neo-Brandeisians announce themselves to be protective of innovation – even, in the case of Tim Wu, of putatively Schumpeterian innovation. But they generally mean this in an exceedingly narrow sense: antitrust should be concerned with preventing existing large firms from unilaterally excluding or buying up (small, new) competitors.” (footnote omitted)). Expectedly, Biden antitrust has adopted several initiatives that fulfill the Neo-Brandeisian agenda despite its unintended consequences.
II. A Storm of Actions
President Biden’s most visible actions on antitrust were the appointment of the most prominent figures of the Neo-Brandeis Movement in critical positions in the administration. Lina Khan is Chair of the FTC,118Press Release, White House, President Biden Announces his Intent to Nominate Lina Khan for Commissioner of the Federal Trade Commission (Mar. 22, 2021), https://perma.cc/4C38-BJU7; see also Lauren Feiner, Lina Khan, Progressive Tech Critic, Sworn in as FTC Chair, CNBC (June 15, 2021, 6:11 PM), https://perma.cc/9VW6-LN6B (noting that “Khan’s confirmation signals a bipartisan desire to impose more regulations on Big Tech companies like Facebook, Amazon, Alphabet and Apple”); Leah Nylen, Huge Win for Progressives as Lina Khan Takes Helm at FTC, Politico (June 15, 2021, 12:55 PM), https://perma.cc/4U5S-VBAV (reporting that the “[t]he surprise move gives progressive Democrats both the reins and a majority at the antitrust agency, spurring hopes among critics of Silicon Valley’s giants for a new assertiveness from the FTC”); Carl Zakrzewski & Tyler Pager, Biden Taps Big Tech Critic Lina Khan to Chair the Federal Trade Commission, Wash. Post (June 15, 2021, 6:50 PM), https://perma.cc/M94W-KGUF (stating that “Biden’s decision to put Khan in charge of the FTC’s agenda is the clearest sign yet that his administration will take a drastically different approach to regulating the tech giants than did President Barack Obama”). Tim Wu advises President Biden in the White House,119Press Release, White House, White House Announces Additional Policy Staff (Mar. 5, 2021), https://perma.cc/4DLX-SCAY; Ryan Tracy, Tim Wu, Big Tech Critic, Named to National Economic Council, Wall St. J. (Mar. 5, 2021, 9:33 AM), https://perma.cc/95P4-4QQ9; Kate Cox, White House Signals Coming Antitrust Push with Tim Wu Appointment, ArsTechnica (Mar. 5, 2021, 1:01 PM), https://perma.cc/2M4P-ATU7 (arguing that “Wu’s new role does not put him in a position to come leaping in with a metaphorical sledgehammer and start smashing up companies”); Lauren Feiner, Big Tech Critic Tim Wu Joins Biden Administration to Work on Competition Policy, CNBC (Mar. 5, 2021, 2:51 PM), https://perma.cc/7N3E-8EQG (“The hire signals the [Biden administration] is serious about competition policy and will likely be viewed favorably among progressives . . . .”). and Jonathan Kanter heads the antitrust division of the Department of Justice (“DOJ”).120Press Release, White House, President Biden Announces Jonathan Kanter for Assistant Attorney General for Antitrust (July 20, 2021), https://perma.cc/2LTL-LHAU. All three personalities are unwavering Neo-Brandeisians who disparage the contributions of the Chicago School which introduced the consumer welfare standard in antitrust121See, for instance, Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. Pa. L. Rev., 925, 925-948 (1979); Robert H. Bork, The Antitrust Paradox: A Policy at War With Itself (1978); How the Chicago School Overshot the Mark: The Effect of Conservative Economic Analysis on U.S. Antitrust (Robert Pitofsky ed., 2008); Herbert Hovenkamp & Fiona Scott Morton, Framing the Chicago School of Antitrust Analysis, 168 U. Pa. L. Rev. 1843 (2020). and advocate for a return to the populist roots of antitrust, which aim to restructure the economy around atomistic competition made by small firms who benefit from a lenient antitrust policy.122See Thomas B. Nachbar, Heroes and Villains of Antitrust, Antitrust Source, June 2019, at 1, 2 (book review); Khan, supra note 70, at 742–46; David Dayen & Alexander Sammon, The New Brandeis Movement Has Its Moment, Am. Prospect (July 21, 2021), https://perma.cc/6BD6-E3ES. In contrast, larger firms are either broken up or subject to aggressive antitrust enforcement.123See Nachbar, supra note 122; Khan, supra note 70, at 803.
A. The Executive Order
President Biden’s Executive Order on Competition is a notable effort to promote competition by a president. Rarely has a president adopted an executive order to encourage competition and address antitrust matters. One notable exception is President Obama’s executive order issued a few months before leaving the White House, titled “Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy.”124Exec. Order No. 13,275, 81 Fed. Reg. 23,417 (Apr. 15, 2016).
However, Biden’s executive order differs in its ambitions. With seventy-two initiatives, the order is more ambitious and radical than any other policy from the current White House or previous administrations that broadly accepted the bipartisan consensus on modern antitrust policies.125Zach Montague, Biden’s Order Includes 72 Initiatives that Take Aim at Very Specific Practices the White House Wants Changed, N.Y. Times (July 9, 2021), https://perma.cc/3SKW-Z5DL; see also Maureen K. Ohlhausen, Does the U.S. Economy Lack Competition? 1 Criterion J. on Innovation 47, 62–63 (2016). The antitrust philosophy of the Biden Administration is contained in the executive order: touted as a “progressive” document,126Phil Gramm & Mike Solon, Biden Turns Back the Progressive Clock, Wall St. J. (July 14, 2021, 2:16 PM), https://perma.cc/QYJ7-72KH. the executive order encapsulates Biden’s endorsement of the Neo-Brandeisians’ view of antitrust. Some suggest that the executive order “does not speak about displacing antitrust’s current economic approach.”127Herbert Hovenkamp, supra note 6,at 386–87. However, a close read of the executive order does not just reveal that the assumptions conveyed in the executive order demonstrate that the Neo-Brandeisians’ analysis has become central to the Biden Administration’s stance on antitrust. More importantly, the recommendations implement “an agenda progressives call ‘predistribution’—the idea that ‘the best path forward is to deal with the underlying market forces that cause inequality in the first place.’”128Atkinson et al., supra note 6, at 1.
For instance, two main policy priorities of the executive order illustrate this “predistribution” agenda by conveying the populist idea that “big is bad,” irrespective of efficiencies. First, section 5(c) of the executive order calls for the antitrust agencies to revise the merger guidelines to adopt a much more aggressive stance on mergers.129Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,991 (July 9, 2021). Aggressively fighting mergers would irremediably slow down the corporate consolidation rate and prevent potential innovations from arising out of vertical integration. Additionally, a departure from the traditional merger enforcement policy would signal a bias toward smaller firms, preventing these firms from competing globally. American competitiveness can deplete due to the impediment to the emergence of “superstar firms.”130See John Ceccio & Christopher Mufarrige, Digital Platform Competition, Merger Control, and the Incentive to Innovate: Don’t Kill the Goose that Lays the Golden Egg, 30 Competition 52, 53, 66 (2020). The Neo-Brandeisian case against mergers is a predistributionist case: the idea is to prevent firms from exercising market power in the first place rather than to redistribute power and income subsequently.
The “father” of the Neo-Brandeisians—Barry Lynn—has recently described the executive order as a “revolutionary” change that would put “democracy and human liberty” at the cornerstone of the future antitrust:
President Biden gave a revolutionary speech in support of an executive order to fight concentrated power and control in the United States. This was back in July, a revolutionary speech in which he says neoliberalism, Borkism – Robert Bork, the antitrust scholar of the late 70s and early 80s who was the father of much of neoliberal competition policy – President Biden said Borkism is a failed experiment, and the north stars for our competition policy shall be democracy and human Liberty.131Virtual Interview with Barry Lynn, Exec. Dir., Open Mkts. Inst. (Oct. 9, 2021), https://perma.cc/9B4X-X9JT.
This is no surprise. The executive order, which is predistributionist, is transformative by notably deconcentrating the economy by blocking mergers.132See Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,987, 36,991 (July 14, 2021). It is also transformative by focusing on promoting smallness, not consumer benefits or innovation.133See ITIF Comment on Merger Enforcement, supra note 77, at 21. The Neo-Brandeisian idea of liberty is a peculiar idea whereby there is no liberty when consumers shop from large companies.134See Khan, supra note 4, at 131. Allegedly, liberty can only come from an unconcentrated economy populated with small firms.135See id. Of course, this notion of liberty ignores the considerable benefits associated with consumers being offered the most efficient and innovative products irrespective of the size of the companies. It also conflates liberty that takes place through political institutions with liberty that does not reflect through the market mechanism.
Second, the executive order aims to weaken the rights of patent holders. It is unsurprising since Neo-Brandeisians see patent holders as monopolists who should be subject to a wrath of obligations and prohibitions rather than to the profits that patent holders can legitimately expect.136Info. Tech. & Innovation Found., Comments on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments 3 (Jan. 25, 2022) [hereinafter ITIF Comments on Draft Policy Statement], https://perma.cc/73MJ-LZCC. Section 5(d) of the executive order calls agencies to “avoid the potential for anticompetitive extension of market power beyond the scope of granted patents, and to protect standard-setting processes from abuse.”137Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,991 (July 9, 2021). To do so, the executive order enjoins the agencies to “revise the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued jointly by the Department of Justice, the United States Patent and Trademark Office, and the National Institute of Standards and Technology on December 19, 2019.”138Id. at 36,991–92. This 2019 policy statement contributed to a rebalancing from the implementers’ concerns to standard essential patent (“SEP”) holders’ concerns.139See U.S. Pat. & Trademark Off., U.S. Dep’t of Just. & Nat’l Inst. of Standards & Tech., Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments 4–6 (2019). In other words, the 2019 policy statement contributed to the much-needed strengthening of intellectual property rights by making injunctive reliefs available against unwilling licensees.140See id.; see also ITIF Comments on Draft Policy Statement, supra note 136, at 3–4.
The executive order’s stance against patent holders and in favor of implementers reveals a preference toward competition over innovation. Inventions must be made available to rivals irrespective of their good faith behaviors and irrespective of the disincentive such availability can create for innovators. The very use of market power by an innovator toward its innovation appears suspicious for Neo-Brandeisians, and such an approach is reflected in the executive order.
These two illustrations demonstrate that the executive order disparages the rationales for innovation—namely, mergers and patent protection—in the name of a more “perfect” competition. Corporate size through mergers and corporate control through patents become suspicious forms of competition. The executive order promotes a form of competition where innovations become less readily available. In other words, the executive order promotes a static state of competition rather than the most valuable form of dynamic competition pioneered by Joseph Schumpeter and widely understood as being the engine of disruptive competition.141Schumpeter, supra note 26, at 103; see also Portuese, supra note 30; Dennis W. Carlton & Robert H. Gertner, Intellectual Property, Antitrust, and Strategic Behavior, 3 Innovation Pol’y & Econ. 29, 29-30 (2003); David S. Evans & Richard Schmalensee, Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries, 2 Innovation Pol’y & Econ., 1, 1 (2002); Douglas H. Ginsburg & Joshua D. Wright, Dynamic Analysis and the Limits of Antitrust Institutions, 78 Antitrust L. J. 1, 1 (2012); Keith N. Hylton, A Unified Framework for Competition Policy and Innovation Policy, 22 Tex. Intell. Prop. L.J.163, 165–66 (2014); Sidak & Teece, supra note 42, at 581; David J. Teece, Next-Generation Competition: New Concepts for Understanding How Innovation Shapes Competition and Policy in the Digital Economy, 9 J.L. Econ. & Pol’y 97, 100 (2012).
More generally, the executive order is made of six sections: (1) Policy; (2) The Statutory Basis of a Whole-of-Government Competition Policy; (3) Agency Cooperation in Oversight, Investigation and Remedies; (4) The White House Competition Council; (5) Further Agency Responsibilities; and (6) General Provisions.142Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (July 9, 2021). Each section guides both the federal government and the private sector regarding the ways the Biden Administration intends to increase competition and decrease the barriers that are perceived as inhibiting competitive behavior. Section 5 calls upon the different federal agencies to take a number of specific actions supporting the administration’s stated policy objectives.143Id. at 36,991–99. Many of these action items focus on labor and employment, health care and medicine, transportation, agriculture, technology, and defense procurement.144Id. The implementation of the executive order is ensured through the creation of the White House Competition Council, which reflects the executive order’s whole-of-government approach to promoting competition.145Id. at 36,990.
B. The White House Competition Council
The original aim of the executive order was to create the White House Competition Council. As part of the whole-of-government approach of the Biden Administration to competition, the executive order details the fourteen federal agencies that are charged with administering authorities associated with preventing anticompetitive behavior:
(1) the Department of the Treasury;
(2) the Department of Agriculture;
(3) the Department of Health and Human Services;
(4) the Department of Transportation;
(5) the Federal Reserve System;
(6) the Federal Trade Commission;
(7) the Securities and Exchange Commission;
(8) the Federal Deposit Insurance Corporation;
(9) the Federal Communications Commission;
(10) the Federal Maritime Commission;
(11) the Commodity Futures Trading Commission;
(12) the Federal Energy Regulatory Commission;
(13) the Consumer Financial Protection Bureau; and
(14) the Surface Transportation Board.146Id. at 36,989.
These agencies are tasked with implementing the executive order mainly through new guidelines, rulemaking activity, and the elimination of government-created barriers to competition.147Id. at 36,990. These agencies are represented in the White House Competition Council.148Exec. Order No. 14,036, 86 Fed. Reg. 36,987, 36,991 (July 9, 2021). Indeed, the Council is comprised of eight cabinet members and the heads of seven independent agencies.149Press Release, White House, Readout of the Inaugural Meeting of the White House Competition Council (Sept. 10, 2021), https://perma.cc/V9MR-SP95. This Council is an innovative and promising institutional forum that can best identify areas where regulations stifle competition. For instance, the area of occupational licensing represents a major venue for promoting competition in the labor markets.
The White House Competition Council catalogs the key areas of action.150White House Competition Council, White House, https://perma.cc/4G7M-Q3Q8. First, competition in healthcare aims at “[l]owering prescription drug and healthcare costs for consumers.”151Id. Second, competition in labor markets aims at “[e]mpowering workers to demand dignity and respect in the workplace.”152Id. Third, competition in finance aims at “[l]owering costs and increasing market transparency for consumers and businesses.”153Id. Fourth, competition in food and agriculture portends at “[l]owering food prices for consumers and increasing earnings for farmers and ranchers.”154Id. Fifth, competition in technology strives to “[l]ower prices and better options for broadband, devices, and other services.”155Id. Sixth, competition in transportation aims at “[l]owering prices for travelers and reducing shipping costs for businesses.”156White House Competition Council, supra note 150. Finally, “[s]topping [a]nticompetitive [m]ergers” is designed to “[e]nforc[e] the antitrust laws to combat monopoly power.”157Id.
The inaugural meeting of the White House Competition Council took place on September 10, 2021.158Press Release, White House, supra note 149. The Council is chaired by Brian Deese, Director of the National Economic Council.159Id. The inaugural meeting was the opportunity for the Biden Administration to emphasize that the executive order on competition fits within a broader agenda. Indeed, the Council Chair noted that the “President’s competition agenda is core to the Administration’s plan to Build Back Better and critical to keeping prices low for American consumers, spurring innovation, and allowing small businesses to compete on a level playing field.”160Id. The emphasis of the executive order to promote and favor small businesses over large businesses is thus clearly stated, thereby demonstrating a bias in favor of deconcentration over innovation concerns.
The second meeting of the White House Competition Council took place on January 24, 2022.161Press Release, White House, Readout of the Second Meeting of the White House Competition Council (Jan. 24, 2022), https://perma.cc/74BV-9U4C. At the second meeting, the Council, comprised of ten cabinet members and the heads of seven independent agencies, welcomed two new members (i.e., the Chair of the Securities and Exchange Commission and the Chair of the Commodity Futures Trading Commission).162Id.
C. Key Nominations
Beyond the Executive Order on Competition, Biden antitrust is characterized by the role and tremendous influence that the Neo-Brandeisians gained during President Biden’s presidency. Key nominations demonstrate such influence.
First, President Biden nominated Tim Wu as competition adviser at the White House.163Press Release, White House, White House Announces Additional Policy Staff (Mar. 5, 2021), https://perma.cc/X7EU-6YFW; Cecilia Kang, A Leading Critic of Big Tech Will Join the White House, N.Y. Times (Mar. 5, 2021), https://perma.cc/9AEB-LRXF. Wu, a Columbia law professor, is best known in the antitrust community for his book The Curse of Bigness: Antitrust in the New Gilded Age.164Wu, supra note 54. Borrowing explicitly from the “Curse of Bigness” chapter in Justice Brandeis’ book Other People’s Money–and How the Bankers Use It, written in 1914,165Louis D. Brandeis, Other People’s Money and How the Bankers Use It 223 (1914). Wu starts his book by writing:
We are four decades into a major political and economic experiment. What happens when the United States and other major nations weaken their laws meant to control the size of industrial giants? What is the impact of allowing unrestricted growth of concentrated private power, and abandoning most curbs on anticompetitive conduct? The answers, I think, are plain. We have managed to recreate both the economics and politics of a century ago–the first Gilded Age—and remain in grave danger of repeating more of the signature errors of the twentieth century. . . . If we learned one thing from the Gilded Age, it should have been this: The road to fascism and dictatorship is paved with failures of economic policy to serve the needs of the general public.166Wu, supra note 54, at 14.
Compare this with President Biden’s speech when signing the Executive Order on Competition:
We’re now 40 years into the experiment of letting giant corporations accumulate more and more power. And . . . what have we gotten from it? Less growth, weakened investment, fewer small businesses. Too many Americans who feel left behind. Too many people who are poorer than their parents. I believe the experiment failed. We have to get back to an economy that grows from the bottom up and the middle out.167Press Release, White House, Remarks by President Biden at Signing of an Executive Order Promoting Competition in the American Economy (July 9, 2021), https://perma.cc/S7KQ-7HMU.
Biden antitrust therefore reflects a Neo-Brandeisian policy that Wu advocates. This is evidenced in Wu’s writing about the need to adopt “a Neo-Brandeisian Agenda,”168Wu, supra note 54, at 127. which revolves around six aspects:
(1) “Merger review”: “The priority for Neo-Brandeisian antitrust is the reform of merger review,” according to Wu.169Id. Calling for “broader and tougher merger standards,” Wu advocated for “a higher bar for giant mergers (over $6 billion in value)” and “a return to structural presumptions, such as a simple but per se ban on mergers that reduce the number of major firms to less than four.”170Id. at 128–29. These proposals echo antitrust bills which propose a per se ban on mergers or reversed burden of proof on the merging parties.171See, for instance, Senator Elizabeth Warren’s bill to prohibit mergers over $5 billion in value, Prohibiting Anticompetitive Mergers Act of 2022, S. 3847, 117th Cong. (2022), and Senator Amy Klobuchar’s bills on mergers, Competition and Antitrust Law Enforcement Reform Act of 2021, S. 225, 117th Cong. (2021); Platform Competition and Opportunity Act of 2021, S. 3197, 117th Cong. (2021).
(2) “Democratization of the Merger Process”: Wu proposed that “[i]ndustry comments on a major merger should be filed publicly, not in secret, and any interested member of the public should be encouraged to file comments.”172Wu, supra note 54, at 129–30. Wu disparaged the risks of “politicization” of this public participation, considering that “big mergers are political.”173Id. at 130 (emphasis omitted).
(3) “Big Cases”: Neo-Brandeisian antitrust fits into the “trustbuster” tradition, and Wu suggests taking inspiration from Europe’s trustbusting record against tech platforms.174Id. at 131. He indeed wrote that “European antitrust is far from perfect, but its leadership and willingness to bring big cases when competition is clearly under threat should serve as a model for American enforcers and for the rest of the world.”175Id. at 131. Recently, the General Court of the European Union annulled an antitrust fine that the European Commission imposed on Intel because of the lack of economic analysis in its fining decision.176Press Release, Gen. Ct. of the Eur. Union, The General Court Annuls in Part the Commission Decision Imposing a Fine € 1.06 Billion on Intel (Jan. 26, 2022), https://perma.cc/4JMA-6TA6. Also, the same court considered that Google should be treated as an essential facility, thereby opening the doors to public utility-style regulation.177Press Release, Gen. Ct. of the Eur. Union, The General Court Largely Dismisses Google’s Action Against the Decision of the Commission Finding that Google Abused its Dominant Position by Favouring Its Own Comparison Shopping Service Over Competing Comparison Shopping Services (Nov. 10, 2021), https://perma.cc/4C98-5DHP (considering that “the general results page has characteristics akin to those of an essential facility inasmuch as there is currently no actual or potential substitute available that would enable it to be replaced in an economically viable manner on the market”). Transplanting European antitrust into American antitrust as Neo-Brandeisians hope will mean less economic analysis of antitrust enforcement and a more precautionary approach to innovative companies.
(4) “Breakups”: Supposedly, “[b]reakups or structural remedies are, effectively, self-executing, and thereby a much cleaner way of dealing with competition problems.”178Wu, supra note 54, at 132–33. Advocating for breaking up large companies, Wu takes Facebook as an example: “While Facebook might not like being dissolved, and might find the new competition unwelcome, it is hard to see what the great social cost, if any, would be. . . . The simplest way to break the power of Facebook is breaking up Facebook.”179Id. Given Wu’s ignorance of the benefits for consumers and innovation of large-scale enterprises, breakups appear to generate only net benefits. However, contrary to the apparent simplicity of breakups, the reality seems less straightforward: a judge dismissed the FTC’s first complaint against Facebook because of the FTC’s inability to demonstrate the market power of Facebook in an artificially defined market.180Diane Bartz, A Judge Dismissed the United States’ Antitrust Lawsuit Against Facebook, Saying the FTC Failed to Show that the Company was a Monopoly, BusinessInsider (June 28, 2021, 3:10 PM), https://perma.cc/RNE3-9K4M; Aurelien Portuese, The Newly Assertive FTC Faces Its First Big Test—and It Doesn’t Look Promising, Info Tech. & Innovation Found. (Aug. 23, 2021),
https://perma.cc/U3YT-5Z2Y; Aurelien Portuese, Facebook’s Antitrust Lawsuit: The Myth of Clean Breakups, Info Tech. & Innovation Found. (Jan. 29, 2021), https://perma.cc/PH39-MBNU. Breakups are not only complicated, but they are also efficiency-decreasing.
(5) “Market Investigations and Competition Rules”: Wu proposes “market investigation . . . tool[s]” to tackle “stagnant and longstanding but not particularly abusive or aggressive monopolies or duopolies.”181Wu, supra note 54, at 133–34. The basic idea is that a market “dominance of at least ten years or longer” would be addressed, absent anticompetitive conduct, through “pro-competitive rules instead of bringing cases.”182Id. This ex ante regulatory intervention may very well tackle innovators who enjoy first-mover advantages and who foster rather than stifle competition. These regulatory tools—inherent to the Neo-Brandeisian agenda—portray the characteristics of the precautionary principle applied to competition matters: innovation and disruption may inevitably be deterred due to risks of overregulation against beneficial practices.183See, for a discussion, Aurelien Portuese, American Precautionary Antitrust: Unrestrained FTC Rulemaking Authority, Info Tech. & Innovation Found. (Jan. 2022), https://perma.cc/EFK2-5JKY [hereinafter Portuese, Unrestrained FTC Rulemaking Authority]; Aurelien Portuese, The Digital Markets Act: European Precautionary Antitrust, Info Tech. & Innovation Found. (May 2021), https://perma.cc/6CA3-NUR9 [hereinafter Portuese, Digital Markets Act]; Aurelien Portuese, Precautionary Antitrust: A Precautionary Tale in European Competition Policy, in Law and Economics of Regulation 203 (Klaus Mathis & Avishalom Tor, eds. 2021); Aurelien Portuese, European Competition Enforcement and the Digital Economy: The Birthplace of Precautionary Antitrust, in The Global Antitrust Institute Report on the Digital Economy 597 (2020).
(6) “Antitrust’s Goals”: Wu argues that antitrust should no longer be about the consumer welfare standard.184Wu, supranote 54, at 135. He considers that “there will be a post-consumer welfare antitrust that is practicable and arguably as predictable as the consumer welfare standard.”185Id. This new standard is the “protection of competition” test which is “focused on protection of a process, as opposed to maximization of a value.”186Id. at 136 (emphases omitted). This test allegedly “attempts to capture far more of the dynamics of the competitive process than do existing analyses, and also implicates political considerations as well.”187Id. at 138. The risks of politicization and increased legal unpredictability loom large with such an open-textured legal standard of “the protection of competition.” Efficiency considerations would become marginalized in an analysis aiming at preserving the market structure irrespective of the lack of anticompetitive conduct. Large corporations not harming consumers may ultimately be considered to thwart “the protection of competition” and thus be subject to a populist anti-bigness antitrust policy at the expense of these firms’ innovation capabilities.
The nomination of Wu to steer the White House’s competition policy demonstrates that Biden antitrust has fully endorsed the Neo-Brandeisian perspective. This is further confirmed by the nomination of the new Chair of the FTC.
Second, President Biden nominated Lina Khan as Chair of the FTC.188Ron Knox, How Washington Got Back into Trustbusting, Wash. Post, (June 25, 2021, 6:00 AM), https://perma.cc/YE63-KP4D. An associate law professor from Columbia University, Khan personifies the New Brandeis School of antitrust, as she has advocated for an “anti-monopoly movement.”189Tomoko Ashizuka, Monopoly Fighter Lina Khan Reframes Debate on Amazon and Facebook, Nikkei Asia (Dec. 14, 2020, 2:05 AM), https://perma.cc/HD6C-VPPM. Khan acclaimed Wu’s book as a necessary “prerequisite for creating the political pressure needed to reorient antitrust around the antimonopoly values it has abandoned in recent decades.”190Khan, supra note 88, at 1658. Khan embarked in Wu’s agenda in agreeing that by “rejecting a strictly welfare-based theory of antitrust, Neo-Brandeisians have an opportunity to design an antitrust regime that reflects republican values and democratizes the institutional structure of antitrust.”191Id. at 1682.
Khan rose to preeminence for her article, Amazon’s Antitrust Paradox, where she accused Amazon of charging too low prices (i.e., predatory prices).192Khan, supra note 70, at 710. She called for “breaking up” Amazon or “applying some form of public utility regulation” to the online supermarkets because that “could make sense.”193Id. at 800. To ignore the consumer benefits generated by the companies Neo-Brandeisians purportedly target, Khan and other Neo-Brandeisians have advocated for antitrust to focus on “structures and a broader set of measures to assess market power”—namely, the preservation of “market structures.”194Khan, supra note 4, at 132. The antimonopoly movement that Khan calls for returns to controversial and economically harmful decisions that protected the “viable, small, locally owned businesses” against the disruptive competition.195Brown Shoe Co. v. United States, 370 U.S. 294, 344 (1962). For a discussion on how antitrust should rather prioritize welfare over the number of competitors, see Joshua D. Wright & Douglas H. Ginsburg, The Goals of Antitrust: Welfare Trumps Choice, 81 Fordham L. Rev. 2405 (2013). Now, Khan has embarked on a battle against the rule of reason (in favor of per se rules of illegality) and the consumer welfare standard more generally.196See Fed. Trade Comm’n, Statement of Chair Lina M. Khan Joined by Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the FTC Act (2021), https://perma.cc/D7PT-8ZK6; see also Phil Gramm & Christine Wilson, The New Progressives Fight Against Consumer Welfare, Wall St. J. (Apr. 4, 2022), https://perma.cc/EKF5-842K.https://www.wsj.com/articles/the-new-progressives-fight-against-consumer-welfare-deregulating-antitrust-enforcement-economy-bipartisan-11649017074.
Jonathan Kanter is perhaps a less radical nominee for President Biden’s radical change on antitrust policy. An antitrust lawyer who notably sued Google and represented Microsoft,197Jay Peters, Google Seeks Recusal Probe for Incoming Antitrust Chief over Yelp and Microsoft Cases, The Verge (Nov. 19, 2021, 6:33 PM), https://perma.cc/MXE7-VY45; see also Josh Kosman & Theo Wayt, DOJ Antitrust Chief’s Past Work for Microsoft Looms over $69B Activision Deal, N.Y. Post (Jan. 19, 2022, 12:14 PM), https://perma.cc/GD4B-4WDT.https://nypost.com/2022/01/19/doj-antitrust-chiefs-past-work-for-microsoft-looms-over-69b-activision-deal/. Kanter is the new head of the antitrust division at the Department of Justice.198Press Release, White House, supra note 120;https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/20/president-biden-announces-jonathan-kanter-for-assistant-attorney-general-for-antitrust/ see also U.S. Panel Approves Big Tech Critic to Head Justice Department Antitrust Division, Reuters (Oct. 29, 2021, 9:14 AM), https://perma.cc/BRN7-W4FB. As the new Assistant Attorney General, Kanter has recently demoted the current state of antitrust by stating that “when I look at the current state of antitrust law, the most charitable explanation is that we are stuck fighting the last generation’s war, with precedent that bears little or no resemblance to today or the future.”199Jonathan Kanter, Assistant Att’y Gen., U.S. Dep’t of Just. Antitrust Div., Remarks to the New York State Bar Association Antitrust Section (Jan. 24, 2022), https://perma.cc/U996-35QC. This radical departure from current antitrust analysis echoes the Neo-Brandeisian call for a return to a state of enforcement before the “40 years experiment” that President Biden lamented when signing the Executive Order on Competition.200Press Release, White House, supra note 168.
These three nominations reveal not only the unprecedented role of Neo-Brandeisians in shaping antitrust policy in America, but they reveal the influence of progressives in designing the economic policy of the Biden Administration more broadly. Together, with the nomination of Rohit Chopra at the Consumer Financial Protection Bureau,201Aaron Gregg, Senate Confirms Rohit Chopra to Lead Consumer Financial Protection Bureau, Wash. Post (Sept. 30, 2021, 4:52 PM), https://perma.cc/FUN5-3JQ5. On Rohit Chopra’s track record as a Neo-Brandeisian, FTC Commissioner, and author, see Leah Nylen, ‘Zombies’ to the Rescue: The Arcane Voting Rule that Could Save Dems’ Antitrust Agenda, Politico (Nov. 8, 2021, 4:31 AM), https://perma.cc/3TJH-C3W9; see also Rohit Chopra & Lina M. Khan, The Case for “Unfair Methods of Competition” Rulemaking, 87 U. Chi. L. Rev. 357 (2020). these three nominations epitomize the unparalleled power that progressives have attained over the economic policy of President Biden. In other words, while Biden won the presidential elections in 2020, it is Senator Warren (and secondarily Senator Sanders) who won the intellectual debates over economic policy among Democrats.
D. Antitrust Bills
Biden antitrust cannot be directly linked with congressional activity. However, the Biden Administration has recently backed a number of antitrust bills that would revolutionize the way antitrust agencies enforce competition rules. The number of antitrust bills introduced over the last two years is unprecedented.202See e.g., Aurelien Portuese, The House’s Antitrust Legislative Package: An Innovation Perspective, Info. Tech. & Innovation Found. (Aug. 2, 2021), https://perma.cc/98WZ-ESER (first citing the American Innovation and Choice Online Act, H.R. 3816, 117th Cong. (2021); then citing the Platform Competition and Opportunity Act, H.R. 3826, 117th Cong. (2021); then citing the Ending Platform Monopolies Act, H.R. 3825, 117th Cong. (2021); then citing the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849, 117th Cong. (2021); then citing the Merger Filing Fee Modernization Act, H.R. 3843, 117th Cong. (2021); and then citing the State Antitrust Enforcement Venue Act of 2021, H.R. 3460, 117th Cong. (2021). See generally Schumpeterian Takes on Pending Antitrust Bills, Info. Tech. & Innovation Found., https://perma.cc/Q6UG-WLZJ. However, the Biden Administration has explicitly defended two bills. Indeed, it is reported that the “Biden team came out in favor of the antitrust measures moving through both houses of Congress.”203Brendan Bordelon, Under Pressure, Biden Backs Antitrust Push, Politico (Feb. 4, 2022, 10:17 AM), https://perma.cc/9WL8-UEW3. This support specifically concerns the American Innovation and Choice Online Act (S.2992)204American Innovation and Choice Online Act, S. 2992, 117th Cong. (2021); see also Aurelien Portuese, Open Letter to Sens. Durbin, Grassley, Klobuchar, and Lee Regarding the American Innovation and Choice Online Act (S.2992), Info. Tech. & Innovation Found. (Jan. 19, 2022), https://perma.cc/3D2V-AHKM. and the Open App Markets Act (S.2710),205Open App Markets Act, S. 2710, 117th Cong. (2021); see also Aurelien Portuese, Open Letter to the Senate Judiciary Committee Regarding the “Open App Markets Act” (S.2710), Info. Tech. & Innovation Found. (Jan. 24, 2022), https://perma.cc/73SZ-L8V6. which were both passed in the Senate Judiciary Committee.
These two bills signal a radical departure from traditional antitrust laws. Indeed, both bills are only narrowly applicable to a few large online platforms, thereby leaving these platforms’ rivals outside the scope of these bills. For instance, the S.2992 bill singles out “online platforms” with a market capitalization higher than $550 billion, leaving multi-billion-dollar rivals (domestic or foreign) free to engage in the very conduct that these bills prohibit.206S. 2992 § 2; see also Aurelien Portuese, How Congress Got It Wrong on Tech Industry Competition, InsideSources (Feb. 16, 2022), https://perma.cc/HRL4-H3EV; Aurelien Portuese, Is Congress Committed to Making American Consumers’ Lives Costlier?, WLF Legal Pulse (Jan. 12, 2022), https://perma.cc/B4UT-V6K5. Among other criteria, this size threshold creates a two-level playing field, thereby creating unfair competition, not fairer competition. The S.2710 bill singles out “app stores” with more than 50 million U.S. users.207S. 2710 § 2. Again, smaller app stores remain outside the remits of the bill, thereby arbitrarily creating an uneven playing field for competition to take place.
Moreover, the business practices prohibited in these bills often are pro-efficiency and pro-innovation. They proceed from competitive constraints rather than subvert the competitive process. For example, the common business practice of self-preferencing enables companies to compete against incumbent on prices, quality, and product differentiation, thereby providing consumers with greater choice, lower prices, and better quality products.208Aurelien Portuese, “Please, Help Yourself”: Toward a Taxonomy of Self-Preferencing, Info. Tech. & Innovation Found., (Oct. 25, 2021), https://perma.cc/L7TK-SKFE. For these bills to prohibit self-preferencing, it amounts to prohibiting one of the key tenets of the competitive process (i.e., competition through innovation, imitation, and differentiation).209Id.
Additionally, Biden antitrust means the support to one of the most controversial and radical antitrust piece of legislation: the European Union’s Digital Markets Act.210For an analysis of the Digital Markets Act, see Portuese, Digital Markets Act, supra, note 184; Aurelien Portuese, The DMA and the EU’s French Presidency: The Road to Precaution and Tensions, Competition F.,Dec. 20, 2021, at 1; Aurelien Portuese, The Digital Markets Act: Precaution over Innovation, Epicenter (June 2021), https://perma.cc/282D-X7HD. This act was designed to harm large U.S. tech platforms211Aurelien Portuese, Reigning in Digital Gatekeepers – a Bad Idea, CEPA (Sept. 23, 2021), https://perma.cc/624F-DRAA; Aurelien Portuese, The EU Must Make (Digital) Peace, Not War, with the United States, New Europe (June 11, 2021, 8:31 AM), https://perma.cc/LF7Q-WZZQ. with a range of prohibitions and obligations represents a source of inspirations for Neo-Brandeisians.212See Ryan Browne, EU Targets U.S. Tech Giants with a New Rulebook Aimed at Curbing Their Dominance, CNBC (Mar. 25, 2021, 10:41 AM), https://perma.cc/RLH8-WC8Z; Maksim Belitski, Aurelian Portuese, Joakim Wernberg, Richard Geibel & Liad Wagman, Misfire: How the Digital Markets Act Will Unwittingly Hurt European Small Businesses, Catalyst Rsch. (June 2021), https://perma.cc/AF8S-X5LB; Meredith Broadbent, Implications of the Digital Markets Act for Transatlantic Cooperation, Ctr. for Strategic & Int’l Studies (Sept. 15, 2021), https://perma.cc/GD3M-2B5X. But, the Secretary of Commerce, Gina Raimondo, voiced considerable concerns about the clear protectionist bias of the Digital Markets Act against U.S. tech companies.213U.S.-EU Partnerships: Transatlantic Goals and Priorities, U.S. Chamber of Com. (Dec. 8, 2021), https://perma.cc/YE7Y-SZVF. Indeed, Raimondo expressed concern over the harm to innovation, consumers, and U.S. entrepreneurship that this future legislation will inevitably have.214See id. In considering U.S. interests, Raimondo cautioned the EU against this protectionist regulation.215Margaret Harding McGill & Ashley Gold, The Biden Administration’s Tightrope Act on Tech, Axios, (Dec. 9, 2021), https://perma.cc/HKM8-VGT7; see also Aurelien Portuese, Biden Administration Rightly Speaks Out on Europe’s DMA, Info. Tech. & Innovation Found. (Dec. 13, 2021), https://perma.cc/44FD-E9SZ.
However, Neo-Brandeisians quickly corrected this departure from Neo-Brandeisian doxa. Indeed, Senator Warren pressured the Biden Administration to endorse the Digital Markets Act216Letter from Elizabeth Warren, Senator, U.S. Senate, to the Honorable Gina Raimondo, Sec’y, U.S. Dep’t of Com. (Mar. 4, 2022), https://perma.cc/JKN9-B4RJ; see also Amanda Kaufman, ‘This is Wrong’: Warren Criticizes Raimondo’s Response to EU Efforts to Regulate US Technology Companies, Boston Globe(Dec. 9, 2021, 4:21 PM), https://perma.cc/98KZ-XMF4.—however targeted against U.S. tech companies this regulation can be—and to express support for the Digital Markets Act.217Cristiano Lima, Biden’s Commerce Chief Is Under Fire from Warren, Progressives for Defending U.S. Tech Giants, Wash. Post (Dec. 15, 2021, 9:04 AM), https://perma.cc/62QE-WC5U; Brendan Bordelon, Warren Ups Pressure on Commerce over EU Antitrust, Politico (Mar. 4, 2022, 10:00 AM), https://perma.cc/PEG3-FQLD. This is precisely what happened: the Biden Administration, dominated by Neo-Brandeisian philosophy, has shown signs of support for the Digital Markets Act.218See Leah Nylen & Samuel Stolton, U.S. Slow to Respond to EU’s Landmark Tech Regulation, Politico (Mar. 25, 2022, 5:14 PM), https://perma.cc/LHU5-REJX. This piece of precautionary antitrust detrimental to American innovation and competitiveness ultimately finds support from the Biden Administration itself. The “Brussels effect” has reached it apex.219The “Brussels effect,” coined by Anu Bradford, refers to the idea that the European Union’s regulatory power has considerable extraterritorial effects, and European institutions use that power to impose European regulations as global standards. Anu Bradford, The Brussels Effects: How the European Union Rules the World 1–2 (2020); Anu Bradford, The Brussels Effect, 107 Nw. U. L. Rev. 1, 3–4 (2012).
Consequently, Biden antitrust is an active support for radical antitrust bills and a controversial piece of EU legislation aimed at harming American innovation and competitiveness. The Neo-Brandeisian’s admiration for the European competition approach entered U.S. antitrust through the Biden Administration.
E. Activities and Reports
The Biden Administration’s activity on antitrust and competition more generally is characterized by a wide range of activities and reports, pursuant to the Executive Order on Competition. Unsurprisingly, the new FTC has engaged in the largest number of initiatives in the most radical way. After having discussed this aggressively activist FTC, this Article will outline the different agencies and departments activities in pursuing the objectives laid down in the executive order on competition.
On July 1, 2021, the FTC rescinded a bipartisan statement issued in 2015 during the Obama presidency regarding the necessary boundaries in pursuing “unfair methods of competition.”220Fed. Trade Comm’n, Statement of Chair Lina M. Khan Joined by Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Statement of Enforcement Principles Regarding “Unfair Methods of Competition” Under Section 5 of the FTC Act (2021), https://perma.cc/D7PT-8ZK6; see also Fed. Trade Comm’n, Remarks of Commissioner Noah Joshua Phillips Regarding the Commission’s Withdrawal of the Section 5 Policy Statement (2021), https://perma.cc/3MTG-FKN5; Fed. Trade Comm’n, Dissenting Statement of Commissioner Christine S. Wilson: Open Commission Meeting on July 1, 2021 (2021), https://perma.cc/3NX7-9RQE; Portuese, Unrestrained FTC Rulemaking Authority, supra note 184. The statement stated that traditional antitrust laws (the Sherman Act and the Clayton Act) are to be preferred in order to tackle unfair methods of competition and that a rule of reason applies to assessing the unfair methods of competition.221Fed. Trade Comm’n, Statement of Enforcement Principles Regarding “unfair methods of Competition” Under Section 5 of the FTC Act (2015), https://perma.cc/WT2M-U5UE. New FTC Chair Khan considered that this bipartisan statement was all wrong; the Neo-Brandeisian FTC writes that “the 2015 Statement contravenes the text, structure, and history of section 5.”222Fed. Trade Comm’n, Statement of the Commission On the Withdrawal of the Statement of Enforcement Principles Regarding “unfair Methods of Competition” Under Section 5 of the FTC Act, at 1 (2021), https://perma.cc/2K99-WSAW. These allegations are dubious and themselves contravene the very history and text of section 5.223Portuese, Unrestrained FTC Rulemaking Authority, supra note 184, at 7–8. But, perhaps what is most important is the fact that the new FTC has disparaged the rule of reason and the consumer welfare standard to impose blanket prohibitions with per se rules of illegality designed to protect rivals, workers, and an unlimited range of public interest considerations. However, this increased legal uncertainty is not a defect but rather the legal policy of the new FTC.
Indeed, the new FTC has dramatically increased the legal uncertainty when it signaled that merging firms may close their deals but at their own perils224Holly Vedova, Fed. Trade Comm’n, Adjusting Merger Review to Deal with the Surge in Merger Filings (Aug. 3, 2021), https://perma.cc/3ATY-X6ZY (“Companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk.”); see also Lauren Feiner, FTC Struggles to Keep Up with Merger Filings, Tells Some Businesses to Merger at Own Risk, CNBC (Aug. 3, 2021, 2:21 PM), https://perma.cc/D4L8-GRCZ.—namely, the FTC is now keen to unwind consummated mergers.225See Feiner, supra note 225. On the detrimental aspects of unwinding consummated mergers, see generally Timothy J. Muris & Jonathan E. Nuechterlein, First Principles for Review of Long-Consummated Mergers, 5 Criterion J. on Innovation, 29 (2020). The regulatory threats and legal uncertainty surrounding acquisition deals have never been as high. Nevertheless, such uncertainty is, again, not a defect but rather the virtue, according to Neo-Brandeisians, of a more aggressive antitrust enforcement.226See Feiner, supra note 225; Vedova, supra note 225. The regulatory uncertainty surrounding mergers has been further increased when the FTC has unilaterally withdrawn its Merger Guidelines without issuing any new guidelines, thereby weaponizing this regulatory uncertainty as a deterrent effect on merger deals. See Fed. Trade Comm’n, Statement of Chair Lina M. Khan, Commissioner Rohit Chopra, and Commissioner Rebecca Kelly Slaughter on the Withdrawal of the Vertical Merger Guidelines (2021), https://perma.cc/LQS4-YQ6Z(merely stating that “the FTC will issue updated guidelines or rules to ensure our merger analysis aligns with market realities. In the interim, the Commission will rely on its statutory authority to apply existing laws when assessing proposed transactions.”); Austin Peay, US FTC Has Sent at Least 50 “Close at Your Own Peril” Letters, Fueling Uncertainty, Phillips Says, Mlex (Feb. 25, 2022, 10:49 PM),
https://perma.cc/HN4B-BYA7. But, as uncertainty deters innovation, and as innovation fosters competition in the marketplace, the uncertainty that the Neo-Brandeisian FTC generates will irremediably decrease the ability of firms to compete through mergers. To prevent firms from competing through external growth (i.e., mergers and acquisitions) leaves firms with the only alternative of competing through internal growth (i.e., sales increase). But, internal growth is often lengthy and not like the disruptive nature of external growth. In other words, the FTC implicitly encourages incremental competition through internal growth as opposed to disruptive competition through external growth. The collateral damage is consumers who may enjoy innovations at a slower pace, companies that may experience slower productivity gains, and ultimately American competitiveness which may degrade given the unrestrained growth of rival powers.
The new FTC has embarked on a Neo-Brandeisian revolution that has not gone unnoticed and uncontroversial.227Brent Kendall, Lina Khan Sees Turbulent Start as Head of Federal Trade Commission, Wall St. J. (Nov. 16, 2021), https://perma.cc/SB9K-VSFE; Leah Nylen, Alex Thompson & Max Tani, Trouble in Khan’s Corner, Politico (Apr. 5, 2022, 6:44 PM), https://perma.cc/3V8C-SL3Y; Nancy Scola, Lina Khan Isn’t Worried About Going Too Far, N.Y. Mag. (Oct. 27, 2021), https://perma.cc/GCB7-GEXK; Leah Nylen, Lina Khan’s Big Tech Crackdown Is Drawing Blowback. It May Succeed Anyway., Politico (Sept. 29, 2021, 7:18 PM), https://perma.cc/EQN2-ABQ8. The FTC requested staff members not to speak publicly.228Leah Nylen & Betsy Woodruff Swan, FTC Staffers Told to Back out of Public Appearances, Politico (July 6, 2021, 9:12 PM), https://perma.cc/6P6B-NRBT; Joshua D. Wright, Lina Khan Is Icarus at the FTC, Wall St. J. (July 13, 2021), https://perma.cc/CP8B-JMQE. Also, the FTC’s priorities for 2022 primarily involve engaging in rulemaking activity for “unfair methods of competition,” under the Executive Order on Competition.229Statement of Regulatory Priorities, 87 Fed. Reg. 5177, 5178 (Jan. 31, 2022). Indeed, the new FTC leadership writes:
Over the coming year, the commission will also explore whether rules defining certain “unfair methods of competition” prohibited by section 5 of the FTC Act would promote competition and provide greater clarity to the market. A recent Executive Order encouraged the Commission to consider competition rulemakings relating to non-compete clauses, surveillance, the right to repair, pay-for-delay pharmaceutical agreements, unfair competition in online marketplaces, occupational licensing, real-estate listing and brokerage, and industry-specific practices that substantially inhibit competition. The Commission will explore the benefits and costs of these and other competition rulemaking ideas.230Id. (footnote omitted).
Although the FTC is likely to lack the authority to engage in substantive “unfair methods of competition” rulemaking,231See generally Portuese, Unrestrained FTC Rulemaking Authority, supra note 184. and although there are likely economic costs associated with the false positives of this rulemaking, one may predict that the new Chair will nevertheless pursue such rulemaking authority.
Also, the FTC has unilaterally rescinded the 2020 Vertical Merger Guidelines, without coordination with the DOJ’s antitrust division, on the premise that these guidelines incorrectly accounted for efficiency defenses and were no longer in line with “market realities.”232Press Release, Fed. Trade Comm’n, supra note 84. Such radical and unilateral withdrawal justified on specious claims generated considerable surprise and disappointment, including by leading antitrust scholars.233E.g., Carl Shapiro & Herbert Hovenkamp, How Will the FTC Evaluate Vertical Mergers?, ProMarket (Sept. 23, 2021), https://perma.cc/73N2-W8MA. For instance, professors Shapiro and Hovenkamp argued that this unilateral withdrawal illustrates the fact that “we have the spectacle of a federal agency basing its policies on a demonstrably false claim that ignores relevant expertise.”234Id. The authors lament that “[i]f the FTC does not understand that basic point about how our economy operates, they are likely to cause real harm.”235Id. The DOJ’s antitrust division and the FTC have now launched a revision of the merger guidelines, both horizontal and vertical.236Press Release, Fed. Trade Comm’n, Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers (Jan. 18, 2022), https://perma.cc/SQ3C-5MN4. See generally Portuese & Carlson, supra note 77. This coordinated effort is to be preferred, although the underlying assumptions for such revision remain questionable.237ITIF Comment Letter on Merger Enforcement, supra note 77, at 3–12.
More generally, pursuant to the Executive Order on Competition, agencies and departments have engaged in several activities, including:
* Competition in Healthcare. The Department of Health and Human Services announced reforms of nursing homes,238Press Release, White House, Fact Sheet: Protecting Seniors by Improving Safety and Quality of Care in the Nation’s Nursing Homes (Feb. 28, 2022), https://perma.cc/NGV2-N6YC. aims of improving the affordability and accessibility of hearing aids,239Press Release, U.S. Food & Drug Admin., FDA Issues Landmark Proposal to Improve Access to Hearing Aid Technology for Millions of Americans (Oct. 19, 2021), https://perma.cc/4HZH-Q74Y. a desire to lower prescription drug prices,240Off. of the Assistant Sec’y for Plan. & Evaluation, U.S. Dep’t of Health & Human Servs., Comprehensive Plan for Addressing High Drug Prices: A Report in Response to the Executive Order on Competition in the American Economy(2021). aims at forcing hospital to increase price transparency,241Press Release, U.S. Dep’t of Health & Hum. Servs., CMS Proposes Rule to Increase Price Transparency, Access to Care, Safety & Health Equity (July 19, 2021), https://perma.cc/WZ3X-6MN8. a desire to import lower-priced drugs from Canada,242Press Release, U.S. Food & Drug Admin., Importation of Drugs Originally Intended for Foreign Markets, https://perma.cc/KW2M-PC5C. and its engagement in reforming the patent system for prescription drugs;243Letter from Janet Woodcock, Acting Comm’r of Food & Drugs, U.S. Food & Drug Admin., to Andrew Hirshfeld, Dir., U.S. Pat. & Trademark Off., (Sept. 10, 2021), https://perma.cc/U2VP-KEFH.
* Competition in Labor Markets. The Treasury Department, together with the DOJ, the Department of Labor, and the FTC, issued a report on competition in labor markets.244U.S. Dep’t of the Treasury, The State of Labor Market Competition (2022). In addition, the DOJ and the Department of Labor want to promote competitive labor markets.245Press Release, U.S. Dep’t of Just., Departments of Justice and Labor Strengthen Partnership to Protect Workers (Mar. 10, 2022), https://perma.cc/8TPH-ADV6. Finally, the DOJ and the FTC organized a public workshop on competition in the labor markets;246Press Release, U.S. Dep’t of Just., Department of Justice Antitrust Division and Federal Trade Commission to Hold Workshop on Promoting Competition in Labor Markets (Oct. 27, 2021), https://perma.cc/RJ6K-9GS5.
* Competition in Finance. The Consumer Financial Protection Bureau has taken action “to halt prepaid card providers  siphoning . . . government benefit[s],”247Press Release, Consumer Fin. Prot. Bureau, CFPB Takes Action to Halt Prepaid Card Providers Siphoning Government Benefits (Feb. 15, 2022), https://perma.cc/RT5L-9XQ7. aims to “save [Americans] billions by reducing  junk fees,”248Press Release, Consumer Fin. Prot. Bureau, Consumer Financial Protection Bureau Launches Initiative to Save Americans Billions in Junk Fees (Jan. 26, 2022), https://perma.cc/BG8A-MR4Q. and helps “people transitioning out of the corrections system.”249Press Release, Consumer Fin. Prot. Bureau, CFPB Penalizes JPay for Siphoning Taxpayer-Funded Benefits Intended to Help People Re-Enter Society After Incarceration (Oct. 19, 2021), https://perma.cc/J3KK-3DLE. Additionally, the Securities and Exchange Commission has proposed to enhance private fund investor protection;250Press Release, U.S. Sec. & Exch. Comm’n, SEC Proposes to Enhance Private Fund Investor Protection (Feb. 9, 2022), https://perma.cc/EZ4K-HD9L.
* Competition in Food and Agriculture. The Department of Agriculture supported expanding “meat and poultry processing options”251Press Release, U.S. Dep’t of Agric., USDA Commits $215 Million to Enhance the American Food Supply Chain (Feb. 24, 2022), https://perma.cc/S3XS-J28U. and promoted American-made fertilizers.252Press Release, U.S. Dep’t of Agric., USDA Announces Plans for $250 Million Investment to Support Innovative American-made Fertilizer to Give US Farmers More Choices in the Marketplace (Mar. 11, 2022), https://perma.cc/76RE-KZHV. The Treasury released a competition report for the alcohol market.253Press Release, U.S. Dep’t of the Treasury, Treasury Releases Competition Report for Alcohol Market, Recommends Boosting Opportunity for Small Businesses (Feb. 9, 2022), https://perma.cc/4DWB-YXBT. The DOJ and the Department of Agriculture created a tool for farmers and ranchers to report anticompetitive practices.254Press Release, U.S. Dep’t of Just., Justice Department and U.S. Department of Agriculture Launch Online Tool Allowing Farmers, Ranchers to Report Anticompetitive Practices (Feb. 3, 2022), https://perma.cc/7Y4A-6M82. The Biden Administration articulated a plan to increase competition in the meat and poultry supply chain.255Press Release, White House, supra note 57. The Department of Agriculture launched a loan guarantee program,256Press Release, U.S. Dep’t of Agric., USDA Launches Loan Guarantee Program to Create More Market Opportunities, Promote Competition and Strengthen America’s Food Supply Chain (Dec. 9, 2021), https://perma.cc/87XC-7925. made investments in meat and poultry processing capacity,257Press Release, U.S. Dep’t of Agric., USDA Announces $500 Million for Expanded Meat & Poultry Processing Capacity as Part of Efforts to Increase Competition, Level the Playing Field for Family Farmers and Ranchers, and Build a Better Food System (July 9, 2021),
https://perma.cc/2UXM-KNKX. enhanced price transparency,258Press Release, U.S. Dep’t of Agric., New USDA Market News Reports to Enhance Price Transparency in Cattle Markets (Aug. 5, 2021), https://perma.cc/45KY-CB8Y; Press Release, U.S. Dep’t of Agric., USDA Announces Efforts to Promote Transparency in Product of the USA Labeling (July 1, 2021), https://perma.cc/76LM-M6MN. and will propose new rules to enforce the Packers and Stockyards Act;259Press Release, U.S. Dep’t of Agric., USDA to Begin Work to Strengthen Enforcement of the Packers and Stockyards Act (June 11, 2021), https://perma.cc/HP7W-MUTL.
* Competition in Technology. The Federal Communications Commission intends to increase broadband competition260Press Release, Fed. Commc’ns Comm’n, FCC Adopts Rules to Give Tenants in Apartments and Office Buildings More Transparency, Competition and Choice for Broadband Service (Feb. 15, 2022), https://perma.cc/9UGP-B3GD. and increase price transparency.261See Press Release, Fed. Commc’ns Comm’n, FCC Proposes Point-of-Sale Labels to Enable Consumers to Comparison Shop Among Broadband Providers and Plans (Jan. 27, 2022), https://perma.cc/TS9D-F97G. It also sought comments to access broadband.262Press Release, Fed. Commc’ns Comm’n, FCC Seeks Comments on Competitive Access to Broadband in Apartment and Office Buildings (Sept. 7, 2021), https://perma.cc/7NQ2-HZCE. The Patent Office implemented the trademark modernization act263Press Release, U.S. Pat. & Trademark Off., USPTO Implements the Trademark Modernization Act (Nov. 17, 2021), https://perma.cc/4FHX-SSBC. and launched the National Council for Expanding American Innovation.264Press Release, U.S. Pat. & Trademark Off., USPTO Launches National Council for Expanding American Innovation (NCEAI) (Sept. 14, 2020), https://perma.cc/Q9RS-EFFJ. The FTC ramped up law enforcement against illegal repair restrictions.265Press Release, Fed. Trade Comm’n, FTC to Ramp Up Law Enforcement Against Illegal Repair Restrictions (July 21, 2021), https://perma.cc/87C6-4N4W. The DOJ sought comments on draft policy statement on licensing negotiations and remedies for standards-essential patents subject to F/RAND Commitments;266Press Release, U.S. Dep’t of Just., Public Comments Welcome on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments (Dec. 6, 2021), https://perma.cc/46MW-B7LM.
* Competition in Transportation. The Department of Transportation provided funds to promote competition in airport terminals267Press Release, Fed. Aviation Admin., Application Process Opens for Bipartisan Infrastructure Law Funds to Build Safe, Sustainable and Accessible Airport Terminals (Feb. 22, 2022), https://perma.cc/ZH4D-2XTB. and acted against unfair and deceptive practices for aviation consumers.268Press Release, U.S. Dep’t of Transp., USDOT Announces Rule to Help Department Move More Swiftly to Protect Aviation Consumers from Unfair and Deceptive Practices (Jan. 24, 2022), https://perma.cc/SA5D-P24V. The Federal Maritime Commission and the DOJ strengthened their partnership to promote fair competition in the shipping industry,269Press Release, U.S. Dep’t of Just., Justice Department and Federal Maritime Commission Reaffirm and Strengthen Partnership to Promote Fair Competition in the Shipping Industry (Feb. 28, 2022), https://perma.cc/28FL-3V99. launched an ocean carriers audit program,270Press Release, Fed. Mar. Comm’n, FMC Establishes Ocean Carriers Audit Program (July 20, 2021), https://perma.cc/8L6X-GACF. provided guidance on complaints process,271Press Release, Fed. Mar. Comm’n, FMC Policy Statements Provide Guidance on Complaints Process (Dec. 28, 2021), https://perma.cc/6PBK-RZ6Z. launched an inquiry into eight ocean carriers’ surcharge fees,272Press Release, Fed. Mar. Comm’n, Commission Questions Shipping Lines About Surcharges (Aug. 4, 2021), https://perma.cc/73NK-PKJL. and approved a new demurrage and detention rule,273See Press Release, Fed. Mar. Comm’n, Commission Invites Comments on Benefits of New Demurrage & Detention Rule (Feb. 4, 2022), https://perma.cc/U3RY-6KHE. as well as a refunding fees rule.274See Press Release, U.S. Dep’t of Transp., Notice of Proposed Rulemaking (NPRM) – Refunding Fees for Delayed Checked Bags and Ancillary Services that Are Not Provided (July 21, 2021), https://perma.cc/SQ9Y-LAZH. The Department of Transportation published a report on its work to for airline companies to provide timely refunds275U.S. Dep’t of Transp., Report to the White House Competition Council: U.S. Department of Transportation’s Investigatory, Enforcement and Other Activities Addressing Lack of Timely Airline Ticket Refunds Associated with the COVID-19 Pandemic (2021). and intends to increase access at Newark for lower cost carriers.276Press Release, U.S. Dep’t of Transp., U.S. Department of Transportation Finalizes Procedures to Increase Access at Newark for Lower Cost Carriers (Feb. 25, 2022), https://perma.cc/XJJ7-MZM9. The FTC Chair announced that the FTC would fight anticompetitive practices on oil and gas markets;277See Letter from Lina M. Khan, Chair, Fed. Trade Comm’n, to the Honorable Brian Deese, Dir., Nat’l Econ. Council (Aug. 25, 2021), https://perma.cc/YP9Y-VUNP. and
* Merger Policy. The Department of Defense published a report on consolidation in the defense sector.278Off. of the Under Sec’y of Def. for Acquisition & Sustainment, U.S. Dep’t of Def., State of Competition Within the Defense Industrial Base (2022). The FTC and the DOJ started the revision process of the merger guidelines279See Press Release, U.S. Dep’t of Just., Justice Department and Federal Trade Commission Seek to Strengthen Enforcement Against Illegal Mergers (Jan. 18, 2022), https://perma.cc/RV76-FESZ. and sought comments on bank merger competitive analysis.280Press Release, U.S. Dep’t of Just., Antitrust Division Seeks Additional Public Comments on Bank Merger Competitive Analysis (Dec. 17, 2021), https://perma.cc/5VQU-H3MH.
Biden antitrust is characterized by an abundance of actions based on numerous assumptions. This Article discussed the dubious assumptions that Neo-Brandeisians achieved to convey within the Biden Administration. To be sure, a number of actions outlined above are beneficial to competition and innovation—mostly because they remove government-created barriers to competition.281See Atkinson et al., supra note 6, at 4–5. However, key proposals are detrimental to generating further innovation and growth in the name of competition.
Biden antitrust is the revival of an antitrust populism that was co-existential with the adoption of the Sherman Act more than a century ago. The antitrust and competition policy of the Biden Administration relies on a large number of flawed assumptions that Neo-Brandeisians have successfully disseminated over the last few years. The competition policy adopted by the Biden Administration signals a radical departure from economic analysis of antitrust laws, disapproves of the legal and economic knowledge accumulated over the last few decades on antitrust enforcement, and is, generally, detrimental to disruptive competition–namely, unfettered competition through radical innovation. Indeed, the promotion of competition by the Biden Administration rests on the promotion of small businesses with incremental, modest forms of competition by preserving a deconcentrated market structure. This renewed antitrust populism disparages disruptive innovation enabled by large businesses. It favors incremental competition by smaller (and sometimes less efficient) businesses. But, it is radical innovation that generates the dynamic competition that benefits consumers, improves American competitiveness,282See Robert D. Atkinson, Opinion, Antitrust Can Hurt U.S. Competitiveness, Wall St. J. (July 5, 2021, 5:25 PM), https://perma.cc/AXT5-XZ2G (discussing how aggressive antitrust regulation can harm competitive U.S. innovation). and, more fundamentally, best embraces the fundamental dynamics of capitalism.
Contrary to the new antitrust populism inherent to Biden antitrust, federal antitrust agencies and courts are well-advised to approach innovation and competition more dynamically.283See generally Portuese, supra note 30. Competition for the next innovation, competition through large-scale enterprises enabling the commercialization of innovation, and competition for opening new markets are essential features of the competitive process. Neo-Brandeisians shaping Biden antitrust unfortunately overlook these aspects at the expense of consumer benefits and the dynamism of the capitalist society. Antitrust agencies should instead focus on the most egregious practices (i.e., cartels and collusive practices) rather than engaging in policies promoting incremental competition at the expense of innovation and consumer welfare. Unfortunately, Biden antitrust has so far embodied the paradox of the new antitrust populism—namely, fighting the disruptive innovation of dynamic competition in the name of promoting “fairer” or “open” competition, which nevertheless stifles innovation and distorts the competitive process.