Anti-Monopoly

In late May, the Federal Trade Commission promoted Patty McDermott to Deputy Assistant Director of the Anticompetitive Practices (ACP) division. The ACP division’s work “involves not only stopping illegal conduct but also shaping the law,” making McDermott’s new position one of interest to corporations overseen by the FTC, beyond run-of-the-mill enforcement.

The Revolving Door Project’s investigation shows that corporate gigs continue to be the most popular positions for FTC lawyers to take after leaving their posts, and reveals the regularity with which economists and analysts revolve to economic consulting firms that serve corporate interests.

In an advertisement released earlier this month, the Lincoln Project, an anti-Trump PAC, claimed that the Trump administration bailed out big banks via its coronavirus stimulus legislation (the CARES Act), leaving Main Street to suffer the effects of the pandemic. “Trump bailed out Wall Street, not Main Street,” a grim voice-over tells the viewer. President Donald Trump quickly took to Twitter hurling insults at the leaders of the PAC. Soon after, Politifact reported the advertisement’s claim was false, and Facebook subsequently labeled the advertisement “partially false.” But the Lincoln Project’s statement is true by any measure: The Trump administration played a central role in crafting the CARES Act, a piece of legislation that has bailed out Wall Street and not Main Street. The designers of the CARES Act must be held responsible for their actions.

In late April, Amazon caught heat from members of the House Judiciary Committee for seemingly lying about the company’s use of data on third party vendors selling in Amazon’s marketplace. Contradicting Amazon in-house counsel (and former DOJ Antitrust official) Nate Sutton’s sworn testimony on the subject in July of 2019, the Wall Street Journal broke the story on April 23rd that Amazon is using proprietary information generated for third-party sellers on the platform to develop its house-brand products.

In the past month, the Small Business Administration (SBA) has gained widespread media attention. This research report reviews the little-known agency’s history.

The Pandemic Anti-Monopoly Act would preemptively stop harmful mergers that not only affect American consumers, but economies all over the world that rely on the same global supply chains. Undoubtedly, companies looking to acquire struggling businesses during the pandemic will try to take advantage of the “failing firm” argument to justify acquisitions. But what actions have lawmakers and antitrust enforcement officials in other countries undertaken to prevent predatory mergers while businesses struggle?

Over the past several weeks, the SBA has been criticized for its administration and oversight of its Paycheck Protection Program (PPP), which offers forgivable loans designed to be spent on payroll expenses. But little attention has been paid to the SBA’s second COVID-response loan effort: the Economic Injury Disaster Loan (EIDL) program. EIDLs provide small businesses affected by disasters with emergency loans. Over the past few decades, the SBA has provided EIDLs after major disasters such as Hurricane Katrina and 9/11.

Revolving Door Project Executive Director Jeff Hauser said, “This anti-competitive merger further entrenches Big Pharma at the expense of all Americans. Big Pharma’s playbook here is no less dangerous for having become rote: They hire well-connected revolving door FTC alumni to secure approval for mergers that undermine the public interest. To restore the public interest at the FTC, we will need to end the FTC-to-BigLaw pipeline that has helped bring about an economy that works well for rich investors rather than American consumers or workers.”

The Small Business Administration’s Office of Advocacy (“Advocacy”) is a little known corner of the executive branch that wields a surprising amount of power, particularly in the regulatory process. This research memo explores the powers Advocacy possesses, how the office gained this power, and the potential Advocacy may have in a progressive administration to be a strong anti-consolidation voice in the regulatory process.

Last week, the Wall Street Journal revealed that contrary to stated company policies, Amazon looks at proprietary information generated for third-party sellers on the platform when developing its house-brand offerings. Cases described to the Journal include Amazon engineers peeking at the total sales, profit margins, and shipping costs for a popular third-party car trunk organizer which sells on Amazon Marketplace. Amazon later used that data to help design its own, rival product. Third-party sellers have long believed that Amazon wasn’t looking at this information because…Amazon said it wasn’t looking at this information. Instead, the tech giant’s control of both the Marketplace and its own house brands grants it an anti-competitive advantage over smaller sellers who depend on Amazon’s marketplace to survive. They can’t check all of their competitors’ stats on a whim to figure out how to drive them out of business.

The Covid-19 pandemic is creating ripe conditions for corporate acquisition sprees by industry giants. But at least one company, already under the microscope, isn’t just looking to pick off competitors. Facebook has its eyes on the supposed cops on this beat, the antitrust enforcement officials ready to jump ship.

A slim majority of individuals whom we could identify, and a strong plurality of the overall data set, have revolved into corporate law firms where they defend clients in the sorts of investigations and approval processes which they themselves used to administer.

This week, we learned that America squandered the opportunity to avoid an imminent critical shortage of lifesaving ventilators, and horrifying medical triage, amid surging COVID-19 cases in New York City, New Orleans, and elsewhere. The New York Times reported that a 2012 merger overseen by the Federal Trade Commission (FTC) foiled public-health officials’ push to replenish the nation’s ventilator supply.

Bloomberg News raised some eyebrows in the media world last week when reports leaked that it won’t investigate former New York mayor and Wall Street darling Michael Bloomberg as he (groan) runs for president. The news outlet also decided to refrain from investigating any other Democrats running, to maintain a level playing field, and added that the opinion page would publish no outside op-eds on the election as long as its owner remained a candidate.

Max Moran
The Revolving Door Project’s mission is to scrutinize the nexus of corporate power and the executive branch. In the United States, two agencies within the executive branch have the power to seek to break up a company: The Federal Trade Commission (FTC), and the Department of Justice’s (DOJ) Antitrust Division. That is why it is important that we research any entanglements undermining the FTC and DOJ Antitrust’s commitment to serving the public interest.