Every Sunday, I do a monopoly round-up for paid subscribers. Today’s review is chock full of news, but the first item is disturbing. So I’ve decided to make the first part of this issue available to everyone.
Over the past few months, Congressional appropriators have been negotiating over the government budget, and the first slate of details came out today. Negotiations over specific departments get handled by different members, and New Hampshire Senator Jeanne Shaheen is in charge of the appropriations bill that funds the Antitrust Division. Unfortunately, Senator Shaheen cut a deal proposing eliminating $45 million from the Antitrust Division 2024’s budget. That would reduce it from $278 million to $233 million, which is roughly 20% less than what enforcers were going to get.
For procedural reasons, the change is worse than it looks. The Antitrust Division is funded in an unusual way. Like most parts of government, some of its money comes directly from the Treasury. However, mergers are cyclical, so sometimes the Division needs more funding and sometimes it doesn’t, based on whether there’s a merger boom. Congress solved this problem in 1989 by letting the Antitrust Division keep some part of the fees that corporations pay when they engage in a merger.
In 2022, Congress increased these fees on a bipartisan basis, with the understanding that Congress wanted more funding for enforcers to address monopolization, especially in big tech. In 2024, the estimate from the Congressional Budget Office is that the Antitrust Division would get about $278 million based on these fees. For context, that’s a little over a quarter of what Apple spent on legal fees in 2017. So not enough, but it’s more than they used to get. And the Division is using its money to file suits against dominant firms across the economy, such as Google (and likely soon Apple, Ticketmaster, and UnitedHealth Group.)
Unfortunately, the change in fees set off a turf war among bureaucrats in Congress. The normal funding process for government agencies is called ‘appropriations’ and goes through the Appropriations Committee. The Appropriations Committee is run by staff who have been doing their job for a long time and have deep technical knowledge of a highly complex budgeting process. The downside of this reservoir of experience is that they can become very turf-driven, believing that funding choices for agencies should go through them. And they can use their perch to contradict Congressional policy to ensure that they control government spending.
That appears to be what happened here. The bill increasing funds to the Antitrust Division came through the Antitrust Subcommittee, not Appropriations. So what likely happened is that Shaheen’s staff decided to use their power to roll back what Congress did in 2022. Instead of $278 million, the Antitrust Division will get $233 million, which is about what it got this year, inflation-adjusted. But more importantly, the following hard to parse text (p. 264) means that the Antitrust Division will be subjected to what is effectively the normal appropriations process from now on, and won’t get more funding when merger work increases. That’s a rollback of policy that’s been in place since 1989.
Now, the appropriations bills haven’t passed, and they will still be modified, so it’s possible that they can be adjusted. And hopefully they will be.
And here’s the rest of the news round-up, a compilation of what happened in the world of monopoly and antitrust over the past week.
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