Biden Administration's Antitrust Crusade: How Has It Impacted The Lives Of Americans?

Since President Biden took office in January 2021, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have filed numerous lawsuits targeting tech companies like Google and Microsoft, as well as airlines and e-commerce companies. The administration's actions have sparked a debate among conservatives about the impact on competition and consumer outcomes.

Jennifer Huddleston, a technology policy research fellow at the Cato Institute, noted a shift in recent antitrust actions away from the traditional consumer welfare standard. She argued that the focus should be on how transactions impact consumers, rather than competitors. Huddleston pointed out that the tech industry has seen creative definitions of market, which can distort the impact of antitrust actions.

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February 05, 2024

One recent example of the administration's antitrust action is the termination of Amazon's proposed acquisition of iRobot. Regulatory hurdles put in place by the FTC and European regulators led to the termination, resulting in iRobot laying off 31% of its workforce. This case highlights the potential negative consequences of aggressive antitrust enforcement on businesses and employees.

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In another case, a federal judge blocked JetBlue Airways' proposed acquisition of Spirit Airlines in response to an antitrust suit from the DOJ. The merger would have created the 5th largest U.S. airline company, bringing it into more direct competition with other prominent airlines. The DOJ argued that Spirit's presence in the market has a broader effect, bringing down prices despite positioning itself as an ultra-low-cost carrier. The blocked merger has raised concerns about the competitiveness of smaller airlines and their ability to survive without mergers.

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Critics of the administration's antitrust efforts argue that they are not considering the potential benefits to consumers that may result from mergers. Jessica Melugin, director of the Center for Technology and Innovation at the Competitive Enterprise Institute, criticized the administration's extreme antitrust agenda, which she believes puts ideology ahead of consumer welfare. She emphasized that past FTCs have acknowledged the pro-competitive effects of mergers.

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Supporters of the Biden administration's antitrust efforts point to the monopolistic control of large tech companies over information distribution. Companies like Google have significant control over what users can view through their search engines, raising concerns about censorship and the need for regulation. Mike Davis, founder and president of the Internet Accountability Project, argued that enforcement of antitrust laws is necessary to target anti-competitive behavior by trillion-dollar Big Tech monopolists.

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The DOJ, under both the Trump and Biden administrations, has targeted Google for its alleged monopoly in the search and advertising markets. Google argues that consumers prefer its search engine and that any antitrust action would hinder consumer experiences. Davis emphasized the need for bipartisan antitrust actions to prevent Big Tech from dominating every aspect of American life.

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In addition to high-profile cases, the FTC has also targeted pharmaceutical companies as part of President Biden's push to lower drug prices. The FTC has secured several court victories that have led to lower healthcare and prescription drug costs for patients. However, Huddleston raised concerns about the FTC's creative definitions of markets that may not reflect the experiences of consumers.

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The FTC filed a suit against Microsoft in January 2022, seeking to block its proposed acquisition of video game company Activision. The FTC argued that the acquisition would give Microsoft too much control over the gaming industry. However, a federal judge denied the motion, stating that the acquisition was unlikely to harm consumers.

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In September, the FTC and 17 state attorneys general sued Amazon, alleging that the company engaged in anti-competitive conduct amounting to a monopoly. The FTC targeted Amazon for a range of alleged tactics, including requirements for sellers to have certain prices in order to be properly marketed.

Huddleston raised concerns about the chilling effect of increased regulatory scrutiny on consumers and small businesses. She questioned whether companies would be hesitant to undertake certain transactions due to the risk of regulatory intervention. The long-term impact of the administration's antitrust actions on consumers and small businesses remains uncertain.