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 Tech, Big Ag, Big 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.
January 06, 2022 | The American Prospect
In theory, nothing prevents Biden from hiring whomever Kanter personally trusts to help execute their shared agenda. So what’s causing the chaos?
November 03, 2021
On November 2, the Revolving Door Project led a coalition of seven organizations in a letter to Penn Law Dean Theodore Ruger. The letter calls on the law school to require its faculty to “clearly disclose any compensation or funding they receive from companies, either direct or indirect (e.g., from a foundation or organization largely funded by a corporation or corporate officer associated with a specific corporation with a stake in the work in question).”
October 20, 2021 | The American Prospect
It was never a secret that Attorney General Merrick Garland was among the key Biden administration figures opposing Jonathan Kanter’s nomination as assistant attorney general for antitrust. Ultimately, however, Garland did not get his way; the appointment went to Kanter rather than to one of the many Big Tech–allied BigLaw partners whom Garland favored. In view of Kanter’s career as a plaintiff’s lawyer, his nomination was rightly celebrated as a decisive victory by antitrust reformers and BigLaw opponents alike. But it was just one battle in a broader war for renewed anti-monopoly enforcement and a DOJ eager to build back better in every policy area.
October 15, 2021 | Talking Points Memo
Facebook continues to lie to the public with abandon. That is one of the main takeaways from the Facebook whistleblower’s testimony last week. Even now, having been called out, Facebook is frantically working to obscure and underplay its own dishonesty.
September 30, 2021
We write to you as a broad coalition of organizations committed to holding corporations that engage in anti-competitive behavior accountable. For far too long, Washington has sat by as technology industry giants have accumulated monopoly power at the expense of consumers and competitors alike. The nomination of Jonathan Kanter to serve as Assistant Attorney General for the Department of Justice Antitrust Division is a strong step toward turning President Joe Biden’s vision of an open economy into reality.
September 09, 2021
Northwestern University Must Change Ethics Regime To Disclose Professors' Big Tech Ties, Letter Argues
The letter calls on the university to implement fair disclosure requirements for its faculty and condemn the unethical practices of former Pritzker Dean Dr. Daniel Rodriguez.
September 01, 2021 | The New Republic
In a move cheered by progressives and antitrust reformers, President Biden has nominated Jonathan Kanter to serve as assistant attorney general for antitrust. Kanter’s nomination, alongside that of Lina Khan to lead the Federal Trade Commission earlier this year, is the latest sign that this administration is, for the first time in generations, fiercely committed to enforcing antitrust laws. However, this generation’s most notorious monopolies—Amazon, Facebook, and Google—are making it vividly clear that they will try anything to retain their power. That apparently includes lobbing poorly reasoned, transparently bad faith calls for their newly anointed foes to recuse themselves from relevant cases.
August 16, 2021
Personnel vacancies and Big Pharma allies in the Biden administration threaten a landmark executive order on competition.
July 22, 2021
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.
June 15, 2021
Lina Khan alone cannot bring in a new age of American trust-busting. Biden still has yet to name his assistant attorney general for antitrust halfway through his first year in office.
May 28, 2021
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.
May 17, 2021
Shelanski, Obama’s second OIRA administrator, now represents monopolies like Facebook and Tyson Foods. His regulatory skepticism and disdain for the emerging antitrust movement would make him a disastrous pick for any role in the Biden administration.