Antitrust, Finance, Government

Big Companies Eye Antitrust Issues As Rhetoric Heats Up

From the Federal Trade Commission to the literary ambitions of two sitting senators, the pressure is building from many directions.

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(Image via Getty)

On April 21, the Senate Commerce Committee held a confirmation hearing for Lina Khan, President Joe Biden’s recent nominee for the Federal Trade Commission. If confirmed, Khan would become the fifth sitting Commissioner at the FTC.

Often contentious affairs in the present era of high political polarization, Khan’s committee confirmation hearing was an actually rather friendly exception. It seemed, in this committee hearing at least, the one thing senators on both sides of the aisle could agree on was Khan’s no-nonsense approach to taking on Big Tech and other sectors that she believes have unfairly reaped the rewards of anti-competitive practices for too long. Khan’s opinions in this area have been increasingly shared by others on Capitol Hill.

Even without Khan, the four presently sitting FTC members, who are split evenly along party lines, are in general agreement that the agency should be taking a harder stance against companies in several areas. Among other things, if Congress fails to do so with a national law, the sitting FTC Commissioners are ready to act to protect the digital privacy rights of consumers. The agency is also asking for more resources to be specifically allocated to enforcement efforts in light of a noted uptick in merger filings recently. While antitrust investigations may be carried out by other authorities, including the Justice Department, a renewed focus on enforcement by the FTC could be particularly significant due to the expansive investigatory powers the agency wields when it comes to anticompetitive conduct.

The FTC is not the only federal agency taking aim at anti-competitive practices. Securities and Exchange Commission Chairman Gary Gensler warned congresspeople in early May about concerning consolidation within the securities wholesaling and brokerage industries. In comments before the House Financial Services Committee on May 6, Gensler expressed his worries about market “fragility” that could be caused by concentration in segments of the financial industry. “At the heart of well-functioning markets and the mission of the SEC of fair, orderly and efficient markets is promoting competition in markets,” said Gensler. He promised his agency would be looking at modernizing their rule set in order to help address these concentration problems.

The rising wave of renewed interest in antitrust issues is even spilling over into popular culture, with two sitting senators’ books on the subject hitting shelves within a week of one another. Amy Klobuchar’s “Antitrust” excoriates Donald Trump for his campaign rhetoric against big companies, and then what she calls the “limited results” he actually accomplished while in office. Meanwhile, Josh Hawley published “The Tyranny of Big Tech,” markedly different in tone from “Antitrust” and seemingly delighting in attacks on his perceived liberal enemies, but also upbraiding companies like Google and Facebook for exerting unchallenged control within the digital marketplace. Klobuchar and Hawley also introduced separate antitrust bills early in 2021. Both measures are currently pending before the Judiciary Committee of the Senate.

Although major tangible actions have yet to materialize, even the increased rhetorical focus on antitrust has been noted in the private sector. Facebook, Amazon, Apple, and Google, wary of the regulatory rhetoric aimed in their direction, have all reportedly been proceeding with extreme caution on any larger acquisitions. Some companies, though, are using the fact that their rivals are ducking for cover as a buying opportunity. Microsoft has actually ramped up acquisitions over the last several years.

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Although the gulf between talk and action on Capitol Hill can be significant, in the present environment, where there is at least some level of bipartisan support for increased antitrust oversight, companies should be aware of the real possibility of more aggressive enforcement efforts against anti-competitive practices. There is the potential for new federal antitrust legislation, and even if a bill cannot get through a divided Congress, federal agencies still have a considerable level of enforcement discretion under existing laws. Companies that fail to assess the possible impact of the current climate surrounding anti-competitive practices do so at their own peril.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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