Congress to Pass Antitrust Laws?
Congress to Pass Antitrust Laws?
People are starting to get it. Corporate concentration is bad.
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This morning, I was watching Bloomberg TV to see what was happening in the financial markets, and I noticed this headline:
“Baby Formula Shortage Shows Risk of US Industry Concentration”
Here’s the screenshot:
Bloomberg TV, like CNBC, is the channel for capital, the kind of news program where people regularly talk up the need for the U.S. to trade away more of its middle class to get European and Asian countries on its side, and where Goldman Sachs strategists ply their wares to an international elite of watchers. And yet, the critique displayed to explain the baby formula shortage is not the standard attack on government, but a clear recognition that monopolies are the cause.
That is pretty meaningful. Over the course of the last ten years, we’ve spent time to persuade millions of people that corporate concentration is a problem. Political progress is slow, because it requires this kind of persuasion, both among voters and policymakers. Bureaucracies don’t change very fast, they need new ideas, new methodologies, and new staff. But that’s happening.
I will say that there is one clear obstacle. Most people simply do not believe that the rule of law is meaningful anymore. A big part of that is a sense that Congress will not, cannot act, especially on core questions of market power. It’s hard to disagree, since there’s not a great deal of evidence to the contrary. But if this report is accurate, then we will soon see real action.
Senate Majority Leader Chuck Schumer (D-N.Y.) intends to put bipartisan tech antitrust legislation up for a vote by early summer, a Democratic source familiar with the situation tells Axios…
Per a source familiar with the meeting, Schumer met with Sens. Amy Klobuchar (D-Minn.) and Richard Durbin (D-Ill.) Wednesday to discuss next steps for Klobuchar's bipartisan bill, the American Innovation and Choice Online Act, which passed out of the Senate Judiciary committee earlier this year.
Putting a bill on the floor likely means it passes, because the bill passed overwhelmingly out of the Judiciary Committee, and few Senators will want to be seen as opposing action against big tech. Then it’ll likely pass the House, because a similar bill passed out of the House Judiciary Committee last June and the same dynamics apply.
How important is this legislation? Substantively, there are probably two bills that will pass. The first is a bill that makes it easier for state officials to bring antitrust cases against big firms. The second is a bill that makes it harder for big tech firms to self-preference their own products ahead of rivals, like Google putting its own reviews ahead of Yelp reviews on Google search, or Amazon putting Amazon basics ahead of third party sellers on its Marketplace.
These will probably improve antitrust law, but they do other more important things. First, they send a signal to judges to take antitrust more seriously and stop tossing cases. And second, they help Congress understand that it can actually structure markets. A big excuse for Congress is that it can’t do anything. A lot of Senators and House members feel powerless, believe it or not. But this process is a template to get over this learned helplessness, because it brought back an old method of passing laws often used in the 1930s and 1940s. You start with oversight and investigation to understand a market, and then you legislate to structure it. In 2019, Congress started to investigate big tech, and went through millions of documents, put CEOs on the witness stand, and wrote a ground-breaking report. These bills are one result.
They are not the only result. Another is that Senator Mike Lee, a Republican who has for his own reasons opposed most of the antitrust legislation that would strengthen the law, has proposed his own bill to break up Google by regulating the way it buys and sells online advertising. Lee’s bill would be excellent as well, as would legislation to regulate app stores, and additional proposals to let newspapers collectively bargain with big tech over ad revenue. What is happening, slowly but surely, is that Congress is figuring out how to address big tech. Google, Apple, Amazon, and Facebook are massive multi-market spanning firms with lots of subsidiaries. There is no one law to address all component parts of each firm. So policymakers are taking on the problem like one eats an elephant, which is one small bite at a time.
And beyond big tech, an anti-consolidation sentiment is coalescing. That’s what the Bloomberg headline on baby formula shows, people get that a few firms controlling a supply chain is bad. It’s why FreightWaves, a shipping and supply chain magazine, is now noting that “Giant container ships are ruining everything,” and focusing on the ocean carrier oligopoly.
The big turn is happening. Take it from Elon Musk, who gets more headlines than anyone in the world these days.
And there we have it.
Of course, this is the same Elon Musk who recently said unions were also monopolies that should be curtailed......