Anti-Monopoly

In the midst of president-elect Biden’s ongoing task of deciding who (and therefore which policies) to include in his future administration, Big Tech and other merger-fueled monopolists are facing unprecedented criticism. One push to rein in corporate giants comes from progressive and grassroots groups, which are arguing for White House officials free of ties to powerful industries such as Big TechBig AgBig Oil, and more. With his incoming administration, Joe Biden has the opportunity to use executive branch power to rein in monopolies by directing his officials to pursue anti-monopoly policy across all economic sectors.

The threat to Big Tech is coming from within the federal government: Google is now facing three antitrust suits from the DOJ and state attorneys general. The FTC also recently sued Facebook. Revolving Door Project’s Jeff Hauser and Demand Progress’ David Segal applauded the FTC’s lawsuit against Facebook, which is aimed at unwinding the company’s killer acquisitions of rivals Instagram and WhatsApp. But they crucially note that “a revolving door between regulators and industry helped create a culture of non-enforcement that has lasted for decades. The effects of this revolving door extend far beyond Facebook, or even Big Tech — they can be seen in our highly concentrated agricultural sector, airline sector, financial sector, and more.” While the monumental lawsuits by the DOJ and FTC represent a new era of holding Big Tech to account, much work remains to change the culture at the antitrust enforcement agencies from merger approval factories to agencies that can readily prevent and break up monopolies.

The House Judiciary Subcommittee on Antitrust’s explosive hearing with the CEOs of Facebook, Apple, Google and (for the first time) Amazon was an incredible example of Congress holding these modern-day robber barons accountable. As the Revolving Door Project’s Eleanor Eagan wrote in the American Prospect, the hearing could be replicated for many other actors, like private equity, which similarly drive economic concentration. Nonetheless, in this context, the hearing drew out the antitrust enforcement agencies’ complicity in our current concentrated economy. As our Max Moran wrote in The New Republic, “throughout the hearing, the figures who really came off looking inept were the federal antitrust enforcement agencies—the Federal Trade Commission (FTC) and the Department of Justice (DOJ) antitrust division.”

This ineptitude might not surprise those of us who pay attention to who actually runs the agencies. As the Revolving Door Project continues to investigate, there is a crisis of incentives at the FTC and the Department of Justice Antitrust Division (ATR), driven by the well-trodden path between government service and corporate boardrooms. We found that career-level officials leave the FTC for private law firms with alarming regularity, and the economists that advise the government on merger cases receive similar opportunities at economic consulting firms. Some officials just skip the middleman and become in-house economists or counsel at large corporations like Facebook and Amazon (in fact, as our Andrea Beaty wrote in Talking Points Memo, Big Tech poached many such officials in the run-up to the antitrust subcommittee hearing). In all cases, these former government officials end up working for firms on the other side of the courtroom from the antitrust enforcement agencies. They bring their insider knowledge of government tactics to their private employers and clients, who often try to avoid government oversight altogether.

Officials in leadership positions at the FTC and ATR are just as influenced by the revolving-door pattern as their career colleagues, and have even more power over merger case outcomes. This year, the Revolving Door Project began tracking merger cases investigated by the FTC and ATR. We’ve found cases riddled with conflicts of interest from both sides of the aisle, in many sectors of the economy, including the regular approval of pharmaceutical mega-mergers that drive up drug costs for Americans. Merger cases are often settled with consent agreements that require the merging parties to divest specific assets, but ultimately still allow consolidation across entire industries. We plan to share our research tracking all second-request cases with the public in hopes of drawing further scrutiny to the former leadership and career officials who switch their loyalty from public interest to private.

Some merger cases show their full effect well after the fact — take for example, the FTC-approved Covidien-Newport acquisition that forestalled the country’s planned stockpile of ventilators, a decision that had deadly consequences during the coronavirus pandemic. As Andrea Beaty wrote in the American Prospect, all five commissioners and the Bureau of Competition head at the time of the decision went on to work at private law firms after leaving the FTC. On the other side of the aisle, pharma giant Covidien’s counsel included a former FTC lawyer who also helped get approval for Google’s acquisition of DoubleClick. And these are the respected experts, the high-profile appointees — the antitrust experts that a future Biden administration might rely on to enact ostensibly progressive reforms.

As the Revolving Door Project noted in Washington Monthly, the world of liberal antitrust experts has been hard at work brainstorming future anti-monopoly policies under a Biden administration. But most calls for change don’t include closing the revolving door between the agencies and corporate entities. Perhaps the omission is tied to how respected officials and academics frequently benefit financially from consultancies at economics firms that sell expert testimony to the government and merging parties alike. The highest-profile example is Fiona Scott Morton, a Yale professor, former ATR chief economist, and consultant for Apple and Amazon. She revealed her work for the two tech giants (as well as a pharmaceutical giant, a medical technology company, and a health insurance organization) while promoting her recent papers on the government antitrust case against Facebook and Google. While her clear conflict of interest shocked onlookers, the many former government officials working for various economic consulting firms suggest the problem is much larger than just one professor. On the whole, our research details how conflicts of interests at the FTC and ATR are a systemic obstacle to real anti-monopoly action.

In other words, there is no viable path to enduring and effective antitrust enforcement without reform to both the rules and norms around who enforces the law on behalf of the public. Reining in unfair competition by corporate America shouldn’t be a stint to turbocharge a private sector career but rather a long term calling — a calling which should be accorded appropriate prestige and compensation.

Finally, the FTC and ATR are not the only agencies that can work to dismantle monopoly power. Agencies like the Department of Agriculture, Department of Defense, Federal Communications Commission and more also have cross-cutting responsibilities that can effectively reduce economic concentration. As our Miranda Litwak wrote for In These Times, the Small Business Association was established by Congress to provide “opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons…” And yet, business owners of color face the same disadvantages they did when the SBA was founded, and are in fact in increasingly precarious situations due to the pandemic with little support from the SBA. Ensuring the survival of small businesses, particularly those owned by members of marginalized communities, is vital to dismantling monopoly power.

To truly tap into the powers that could reduce economic consolidation on the whole, a future Biden administration would need a central force to install anti-monopoly thinking across the executive branch. The National Economic Council functions as a clearinghouse for all policies and programs consistent with the larger domestic economic goals of an administration. This would make it a fitting forum to both monitor and spur anti-monopoly work. Taking down monopolies will require more than policy reform and closing the revolving door; it will take a concerted effort from all government agencies which oversee the actors seeking to consolidate the economy.

Below you will find some of the project’s writing and research on anti-monopoly policy. For a selection of quotes and interviews on the topic, please visit this page.

July 22, 2021

Timi Iwayemi Fatou Ndiaye

Report

Anti-MonopolyIndependent AgenciesIntellectual PropertyPharmaTrade Policy

The Industry Agenda: Big Pharma

In 2019, Gallup found that the pharmaceutical industry was “the most poorly regarded industry in Americans’ eyes,” and rightfully so. Pharmaceutical companies often set drug prices exorbitantly high, including life-saving drugs which patients literally cannot go without, such as insulin. This includes older drugs that are cheaper to produce — such as epinephrine (emergency medication used to treat severe allergic reactions and asthma attacks). These firms achieve this by stifling competition at the consumer’s expense, jealously protecting their money-makers from the generics which the pharmaceutical system is supposed to develop after a patent expires.

May 28, 2021

Andrea Beaty Henry Burke

Blog Post

Anti-MonopolyFTCGovernment Capacity

Hobbled FTC Lacks Budget To Combat Corporate Buying Spree

Progressives have been encouraged by President Biden’s choices of anti-monopoly leadership in Lina Khan, Tim Wu, and (potentially) Jonathan Kanter. But in the interregnum between personnel announcements and actual confirmations, corporations are getting as many transactions done now as possible. And while the Biden Administration seems on the precipice of reining in the power of Big Tech and other monopolists soon, the FTC, one of the two agencies charged with enforcing antitrust law, continues to be hobbled by chronic underfunding.

April 19, 2021 | The Daily Beast

Miranda Litwak

Op-Ed

2020 Election/TransitionAnti-Monopoly

Silicon Valley’s Favorite Fixer Aims to Stop the Rising Left

But the old guard continues to wield significant power and will be hard pressed to admit defeat, as exemplified by political strategist Bradley Tusk’s continued success. Some might recall Tusk as New York Mayor Bill De Blasio’s biggest critic. Others know him best as Silicon Valley’s favorite political fixer. Teachers’ unions probably remember him comparing them to the NRA. Tusk’s particular brand of politics—lobbying against regulation on behalf of companies he then invests in—in some ways represents the last gasp of corporate control over government that has run rampant since the Reagan era.

March 31, 2021

Andrea Beaty

Blog Post

Anti-MonopolyDepartment of Justice

Facebook Strengthens Defenses Against Break Up By Hiring Another DOJ Antitrust Official

Another day, another former antitrust enforcer defecting for the corporate world. In the months since President Joe Biden promised to pursue more aggressive antitrust enforcement, former antitrust officials have become an even hotter commodity in the private sector. Douglas Rathbun is the latest official to jump ship from the increasingly central world of antitrust enforcement to the more lucrative world of defending the status quo. Rathbun is a former counsel for the Antitrust Division’s Office of Legal Policy and has advised the Division on administrative and regulatory matters as well as guided nominees to senior leadership positions. According to his LinkedIn, Rathbun elected to cut out the BigLaw middleman and join a corporation directly: this month he joined Facebook to work on public policy.

March 16, 2021

Zena Wolf

Blog Post

2020 Election/TransitionAnti-Monopoly

Revolver Spotlight: Einer Elhauge

Reports that Harvard Law Professor Einer Elhauge is being considered for a role in the Biden Administration should be treated with extreme caution due to his history of ties to Big Tech and work for the Republican Florida legislature in 2000. Although we at RDP applaud Elhauge’s recent pivot to support strengthening antitrust laws, we urge the Biden Administration to hold appointees to the highest possible standard. In particular, helping promulgate the absurd theory in 2000 that state legislatures can overrule elections conducted under laws they have passed should be disqualifying for any individual attempting to serve in the Biden Administration.

February 23, 2021 | Jacobin

Alex N. Press

Interview

Anti-MonopolyDepartment of JusticeEthics in GovernmentRevolving DoorTech

INTERVIEW: Who Is Merrick Garland's Friend Jamie Gorelick?

Jamie Gorelick, a high-powered lawyer who defended the city of Chicago after the police murder of Laquan McDonald and sits on the board of Amazon, is a case study of the influence big corporate law firms wield behind the scenes in Washington — and she has friends like Merrick Garland in high places in the Biden administration. The Revolving Door Project’s Elias Alsbergas and Max Moran spoke with Jacobin’s Alex N. Press about what Gorelick’s ties to Garland could mean for the Biden Administration’s Justice Department.

February 15, 2021

Jeff Hauser Andrea Beaty

Blog Post

Anti-MonopolyDepartment of Justice

Trump Appointees Still Setting Agenda At Biden’s Antitrust Division

Last week the Biden administration appointed career civil servant Richard Powers as Acting Assistant Attorney General for the Department of Justice Antitrust Division (ATR). With the question of who will become Assistant Attorney General still up in the air and their confirmation likely several months away, the direction of the ATR’s enforcement is left in the hands of three top officials.

January 22, 2021

Andrea Beaty Miranda Litwak

Blog Post

2020 Election/TransitionAnti-MonopolyTech

Big Tech’s Top Picks to Lead DOJ Antitrust Division

Big Tech has a huge stake in who Biden ultimately staffs his antitrust and tech regulators. These individuals will decide how aggressively to carry out Biden’s promises of reining in the political and market power of these companies. If Big Tech gets its way, Biden will staff his antitrust teams with its attorneys and allies, who have pushed back against calls to break up these monopolies and protected them against regulation and enforcement. But if Biden wants to keep his campaign promises to take on monopolies, he must shut the revolving door between the federal government and Big Tech. That starts by rejecting for top jobs the following Big Tech allies.

January 22, 2021

Miranda Litwak Andrea Beaty

Blog Post

Anti-MonopolyBigLaw

Right-Wing “Holding Pen” Firm May Snag Antitrust Division If Susan Davies Is Appointed

In a disappointing continuation from the Trump Administration, Politico reported last week that a Kirkland & Ellis lawyer is in contention to help lead the Department of Justice, raising serious concerns among anti-monopoly advocates. According to the article, Susan Davies, a litigation partner at Kirkland, might be the next assistant attorney general for antitrust.