With economic inequality soaring to heights not seen in the United States since the progressive era of the early 20th century, it makes sense that some issues on the policy agenda from that bygone age are re-emerging today. Among them: antitrust.
In recent years, the rise of corporate concentration, its negative effects on the broader economy, and the atrophy of antitrust enforcement have become the subject of increasing progressive concern. While some liberals argue that lax enforcement is the problem, a growing number contend that the statutes themselves, or at least the standards by which the consequences of concentration should be measured, need to be expanded.
On October 5, the Democrats on the House Judiciary Committee and members of the House Progressive Caucus jointly hosted a discussion of how best to revive a serious antitrust program, in which panelists offered divergent views of both the diagnosis and the cure. Diana Moss, president of the American Antitrust Institute, argued that the problem was the weak enforcement of existing law. She noted that the Federal Trade Commission has brought claims that a company has violated Section 2 of the Sherman Act—the blockbuster 1890 law that made it illegal for any person to monopolize or attempt to monopolize part of the economy—fewer than ten times in the last 20 years, but that on paper, at least, existing antitrust law like the Sherman Act and the consumer-welfare standard for merger review are sufficient to address the problem of contemporary market consolidation, if regulators are given the incentives to enforce them.
Taking a different tack, Marshall Steinbaum, the director of research at the Roosevelt Institute, contended that the consumer-welfare standard, which sees costs to consumers as the primary measure of anti-competitive behavior, has been outmoded by contemporary practices. He illustrated this with the example of Amazon's acquisition of Whole Foods: Amazon promised to cut consumer prices in the weeks before the deal, and in turn the FTC spent less than a month reviewing the merger for antitrust concerns. Just weeks after the acquisition, however, Amazon centralized decision-making about how local suppliers would be allowed to advertise their goods in-store, a decision that may make it difficult for small suppliers to gain a foothold in stores.
Two other panelists, Marcellus Andrews, an economist at Bucknell University, and Lina Khan, director of legal policy at Open Markets (the recently formed antitrust group that broke away from New America), both made clear the breadth of issues affected by antitrust laws. “It is difficult to overstate the effects of market concentration,” said Khan, noting that concentrated supply chains in Puerto Rico meant that damage caused by Hurricanes Maria and Irma had caused a nationwide drug shortage. Andrews played out some of the implications of antitrust for racial justice, noting that the “monopoly premium,” the additional cost of a good above the market price added on to it by a monopolizer, multiplied the impact of credit discrimination against minority communities.
Antitrust has gained more prominence since this summer, when Democrats made it a centerpiece of their “Better Deal” agenda. But coming up with specific policies to deal with the most pressing issues raised by economic concentration is no small challenge. Representative Keith Ellison, who took on role of host at the forum, also took time to plug his bill, the Independent Retrospective Merger Act, which would task the Department of Justice’s Antitrust Division and the FTC with evaluating whether a merger hurt consumers or promoted anti-competitive behavior. Ellison’s bill could help regulators respond to acquisitions like the one Amazon made, where arguably anti-competitive practices began only weeks after a merger.
Forums like these are signs that antitrust, the vogue of early 20th-century America, is back on the rise.
