In bold step, Biden launches assault on US corporate power

US president Joe Biden has signed an executive order aimed at cracking down on big tech firms, in one of the biggest moves against corporate power by an American president in nearly a century.

On Friday, Biden gave the most significant speech on monopolies since Franklin Delano Roosevelt (FDR) in 1938, effectively pronouncing the era of corporate power to be over.

“Capitalism without competition isn’t capitalism,” Biden said. “It’s exploitation.”

Following FDR, Biden emphasised the importance of small business, workers and consumers, and even cited FDR’s call for an economic bill of rights.

“We are now forty years into the experiment of letting giant corporations accumulate more and more power,” he said, calling out Chicago School pioneers like Robert Bork and the implications of their ideology as “a failure.”

On the surface, Biden’s discourse gives the impression of a bold attempt to restructure the Democratic party and break forty years of pro-corporate policy making.

After the speech, the president signed an executive order mandating the policy of the US Federal government to promote fair competition, not just through antitrust laws, but through every agency with authority to structure markets.

Standing behind Biden as he signed the order was Lina Khan, the new chair of the Federal Trade Commission (FTC), a prominent Big Tech critic and proponent of expanding antitrust enforcement.

Shortly after the signing, news broke that the FTC was launching a lengthy probe into Amazon’s $8.5 billion purchase of MGM studios.

It also comes weeks after the House Judiciary Committee voted to approve a set of antitrust bills that could eventually become law, in addition to various tech firms being slapped with anti-competitive lawsuits.

What does the executive order do?

The order, which the White House described as a “whole-of-government effort to promote competition in the American economy,” has three essential parts.

The first is a policy statement which asserts that the US government is dedicated to combating corporate concentration in the economy.

Second, is that the White House will set up a formal council with heads of most cabinet agencies and regulators to discuss matters related to competition.

The third is a list of 72 actions and recommendations involving ten agencies.

Overall, the administration has targeted a number of sectors with the order apart from technology, including healthcare and agriculture.

It includes directions to craft rules on data surveillance, barring unfair methods of competition on internet marketplaces, restrictions on defence contractors, a mandate to import pharmaceuticals from Canada, hospital price transparency, a crackdown on cheating in the medical industry, and studies on the concentration in food systems.

Once fully implemented, it would allow hearing aids to be sold over the counter, for example, as well as ban early exit fees from internet contracts. It also intends to make it easier for consumers to claim airline refunds.

Many of the items listed in the order require the FTC’s authority, which is the de facto enforcer of consumer protection and antitrust laws. Others require agencies to consult with the FTC when carrying out studies or issuing rules.

Mixed reactions

On the Democratic side, progressives like Elizabeth Warren, Ro Khanna, Mondaire Jones and Chuy Garcia came out in strong support for the order, as did Senator Amy Klobuchar, the chair of the antitrust subcommittee.

Many traditionally rightwing groups also came out in favour. The American Farm Bureau were happy about Biden’s attempt to redress consolidation in the food supply chain, while the US Cattlemen’s Association praised his attack on the industry’s big four meatpackers.

Reaction from big business was much more critical.

The Association of American Railroads alleges the order fundamentally threatens the viability of the country’s transport system.

The trade association Netchoice, which counts many tech giants like Google, Facebook and Amazon – as well as Chinese firms like Alibaba – as its members, released a statement claiming that Biden’s actions against monopoly are opening the door to “progressive antitrust activism,” and if unimpeded will result in “importing a European-style antitrust framework to all sections of the American economy.”

The US Chamber of Commerce also dismissed the order, saying it was “built on the flawed belief that our economy is over-concentrated, stagnant and fails to generate private investment needed to spur innovation”.

Neil Bradley, the Chamber’s executive vice president and chief policy officer, said: “Our economy needs both large and small businesses to thrive – not centralised government dictates.”

Can Biden follow through on it?

The executive order alone does not mean the recommendations will automatically usher in a new competition regime. Government agencies responsible will need to implement the changes, while some could be subject to court challenges.

One hurdle at the moment is that Biden and the Senate have not adequately staffed up the administration yet.

There is no nominee for a host of important positions – from the head of antitrust at the Justice Department to the chief at the Office of Management and Budget, not to mention multiple bank regulator, Pentagon, and Department of Commerce vacancies.

Whether the Federal government will have the political will to prioritise competition issues will be another challenge.

At a symbolic level at least, the order signals an effort by Biden to chart out a more populist path than his party’s predecessor, Barack Obama. He believes that big business is too big – and wants to do something about it.