The Sherman Antitrust Act has long been recognized as a charter for economic freedom. That 1890 law, together with the Clayton Antitrust Act of 1914 adopted under President Woodrow Wilson, has long served to protect the American public from economic dominance in the hands of a few.
Nonetheless, over the past few decades, we have witnessed a long decline in antitrust enforcement and a weakening in antitrust doctrine by the federal courts and an increase in economic power and concentration by large business. Most markets today are dominated by just a few major players, whether in pharmaceuticals, banking, cellular services, agriculture and food production or even retail. In the past 20 years we have experienced exponential growth by just a handful of technology companies and platforms in social media and online services by mergers and outright anti-competitive conduct.
Market concentration and power in the hands of a few dominant companies serves no one outside of their shareholders and executives. It can result in higher prices for all, the stifling of innovation which limits new and better services and products, the loss of productivity and a long slow decline of jobs and wage increases. Even shareholders and investors lose in the long run as American competitiveness declines and the economy fails to realize its full potential.
The answer is not simply more regulation; the government needs to get to the root of the problem and update the laws that govern antitrust policies. We need to update laws in order to ensure open markets, fair competition, and room for new entrants and innovation to give all Americans the opportunity to have a meaningful and prosperous role in our economy. As a country, we must embrace innovative businesses, be open to new ideas and allow for healthy competition. Modernizing our antitrust policy will help further achieve that goal.
To best address the inadequacy of the United States’ ability to provide oversight, Delaney will propose amendments to our antitrust laws to:
- Instruct the federal courts and the antitrust enforcement agencies to also weigh long term market structure when reviewing a proposed merger; that is to consider whether a big company simply wants to buy out a future competitor or perceived threat to its market share, such as Google acquiring DoubleClick or YouTube and Facebook acquiring Instagram or WhatsApp, and to adopt a strong presumption that a substantial share of any market is too much for a single enterprise;
- Extend the Clayton Act to block vertical, not just horizontal mergers, that could in either the short or long run lessen competition or squeeze market participants in the middle. This is especially egregious in certain areas like agriculture where a handful of huge companies supply all inputs that farmers need such as seeds, fertilizers and equipment, and then position themselves as the only customers to buy the farmer’s output or production in grain and livestock markets; and
- Make it clear that the Clayton and Sherman Acts authorize the unwinding of past mergers and means of competition that were not regarded as anti-competitive when first accomplished. In theory this has long been possible but old mergers and existing means are rarely challenged – we have not seen this since the Antitrust Division of the Department of Justice moved to break up the old Bell Telephone network over 40 years ago.
Antitrust policy has for most of our history been a bipartisan effort. We lost our way in the internet and wireless age, and our laws have not kept up with the technological revolution. We must do better.