Antitrust Failure is a Win For Consumers | Citizens Against Government Waste

Antitrust Failure is a Win For Consumers

The WasteWatcher

Throughout the 117th Congress, Democrats in Congress like Sen. Amy Klobuchar (D-Minn.), Rep. David Cicilline (D-R.I.), and Rep. Jerry Nadler (D-N.Y.), and Republicans like Sen. Chuck Grassley (R-Iowa) and Rep. Ken Buck (R-Colo.) have introduced or led the effort to pass several bills that would “reform” antitrust laws.  Now that the midterm elections are in the rearview mirror, these bills may have reached the end of their shelf lives.  But if one or more of them is signed into law, it would be a radical departure from decades of antitrust law and harmful to consumers.  Whatever their fate may be, antitrust measures, particularly those that are purportedly aimed at reining in so-called Big Tech companies, are likely to be brought up again in the 118th Congress.  

The House Judiciary Committee voted to report to the House floor six antitrust bills on June 24, 2021, including H.R. 3816, the American Choice and Innovation Act (a companion bill to Sen. Klobuchar’s S. 2992) and H.R. 3825, the Ending Platform Monopolies Act.  The bills included proposals that were provided in an October 2020 House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law majority staff report.  Citizens Against Government Waste described the report as a “449-page partisan and ill-informed treatise, which was a complete waste of the taxpayers’ money” that “strikes out at various digital platforms, many of which directly compete against each other.”  None of the six bills has been brought to the floor of the House for a vote. 

The Senate priority for antitrust bills has been S. 2992.  In January 2022, the Council for Citizens Against Government Waste (CCAGW) wrote a letter to the Senate Judiciary Committee urging its members to oppose the legislation.  A revised version of the bill passed by a vote of 16-6 in the committee in January 2022, but bipartisan opposition has prevented it from receiving a vote on the floor of the Senate. 

The bill would prohibit so-called “self-preferencing” by supposedly large tech companies like Amazon, Meta (formerly known as Facebook), and Google.  The example that proponents of this bill most often cite is Amazon promoting AmazonBasics products and offering free two-day shipping to Amazon Prime customers.  Supporters of S. 2992 claim that Amazon’s listing of their own private label products higher in the search results give them an advantage over other sellers. 

Consumers benefit from buying products at lower prices, regardless of who sells them or where they are displayed in search engine results, and consumers could be harmed if they no longer have that choice.  The legislation also ignores the fact that most, if not all, of those products are made by companies other than Amazon, and many of them are small businesses, similar to private labels across the entire retail industry, including grocery stores.  S. 2992 would interfere in a healthy and competitive marketplace that does not need government intervention. 

S. 2992, H.R. 3825, and other antitrust bills would also give Federal Trade Commission (FTC) Chair Lina Khan the power to determine what constitutes a conflict of interest or “unlawful discriminatory conduct” and seek legal action against companies that violate these vague concepts.  Chair Khan has made it her mission to increase antitrust enforcement and expand the FTC’s power beyond its original mission, including disregarding the well-established consumer welfare standard that has been a hallmark of the FTC’s mission for decades and attempting to establish consumer data privacy rules for the entire economy.  If Congress passes bills that give her agency more power, then no sector of the economy will be safe from Chair Khan and her team of unelected bureaucrats. 

The antitrust bills being considered in Congress are a solution in search of a problem.  Proponents have claimed that large technology companies are monopolies that stifle competition and innovation, despite the tech sector being especially competitive.  For example, in February 2021, Sen. Klobuchar said that breaking up Facebook was one possible antitrust reform.  Meta’s stock plummeted from $270 per share in February 2021 to $97 per share in early November 2022, and the company is planning to implement large-scale layoffs.  Its value dropped so low that it would not be a covered platform under S. 2992. 

A company that may be big today, could be small tomorrow, and the same is true of a small technology company seeking to grow or be purchased by another company, which is how the free market should work.  And large technology companies rely on  thousands of small companies to provide the technology that enable various platforms to sell goods and services from small businesses.

If Sen. Klobuchar and her allies get their way, they will give Chair Khan the green light to interfere in a highly competitive and innovative economy.  No one knows what innovation will bring in the future, and the companies that the antitrust bill supporters in Congress and bureaucrats at the FTC claim are monopolies today may not be nearly as large in the future due to fierce competition from other tech companies. 

Thankfully for consumers, the 117th Congress is nearly complete and with split control of 118th Congress, it will be more difficult for any major antitrust reforms to be enacted.  Instead, Congress should determine how to prevent Chair Khan from grabbing even more control over the economy, restore the consumer welfare standard, and further help consumers by refusing to take up these antitrust bills.

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