President Joe Biden signed an executive order on Friday aimed at promoting competition across the U.S. economy — including measures that target big tech companies, aim to lower prices for consumers and call for greater scrutiny of mergers across industries.
"The heart of American capitalism is a simple idea: open and fair competition," said Biden before signing the order. "Capitalism without competition isn't capitalism. It's exploitation. Without healthy competition big players can change and charge whatever they want, and treat you however they want — and for too many Americans that means accepting a bad deal for things you can't go without."
The order contains 72 initiatives by more than a dozen federal agencies and establishes a White House Competition Council to monitor the agencies' progress.
Labor markets
Biden is calling on the Federal Trade Commission to ban or limit non-compete agreements, which keep workers from leaving their employer for positions at rival firms. Critics argue the agreements reduce wages by taking away workers' employment options.
Biden "believes that if someone offers you a better job, you should be able to take it. It makes sense,” said White House Press Secretary Jen Psaki earlier this week.
The order will also encourage the FTC to ban "unnecessary" job licensing requirements, that "impede economic mobility." Biden is also asking the FTC and Department of Justice to strengthen antitrust guidance to keep employers from collaborating to suppress wages or reduce benefits.
The administration argues these actions will help raise wages and make it easier for workers to change jobs.
The U.S. Chamber of Commerce blasted the executive order in a statement, saying the order is "built on the flawed belief that our economy is over concentrated, stagnant, and fails to generate private investment needed to spur innovation."
"Our economy needs both large and small businesses to thrive — not centralized government dictates. In many industries, size and scale are important not only to compete, but also to justify massive levels of investment. Larger businesses are also strong partners that rely on and facilitate the growth of smaller businesses," added Neil Bradley, the Chamber's executive vice president and chief policy officer.
Technology
The White House aims to crack down on big tech companies, arguing that they gather too much information on consumers, purchase potential competitors and unfairly compete with small businesses.
"Over the past 10 years, the largest tech platforms have acquired hundreds of companies—including alleged “killer acquisitions” meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions," the White House wrote in a factsheet.
The executive order calls for greater scrutiny of mergers, new FTC rules to curb data collection and surveillance and rules to bar unfair competition on internet marketplaces.
"The large platforms’ power gives them unfair opportunities to get a leg up on the small businesses that rely on them to reach customers," said the factsheet.
The order comes shortly after the House Judiciary Committee passed six antitrust bills aimed at spurring more Big Tech competition.
Health care
The president is directing federal agencies to take steps toward reducing drug prices for consumers. The order urges the agencies to work with states and tribes to import prescription drugs from Canada and increase support for generics.
The Department of Health and Human Services must issue a plan within 45 days to fight high prices and price gouging. Within 120 days, HHS should issue proposed rules to allow hearing aids to be sold over- the-counter. The agency is also tasked with standardizing plan options in the National Health Insurance Marketplace to make comparison shopping easier.
The administration notes that hospital consolidation has left many rural communities without options for convenient health care. Biden is calling on the Justice Department and the FTC to review its merger guidelines.
Transportation
The White House argues "inadequate competition" has reduced incentives for airlines to provide good service. In response, the president is directing the Department of Transportation to issue rules requiring airlines to refund consumer fees when their bags are late or when the plane's WiFi doesn't work. DOT estimates airlines were late in delivering at least 2.3 million checked bags in 2019.
The DOT is also tasked with issuing rules requiring fees to be clearly disclosed to customers.
Agencies will also crack down on railroads and ocean shipping to reduce the costs of transporting goods.
"A lot of American companies rely on railroads to ship their goods domestically and ocean carriers to ship their goods internationally. Both of these industries have grown more concentrated over time," said Psaki on Thursday. "That concentration has contributed to a spike in shipping costs and fees during the pandemic. For example, the index price to ship one container has gone up eightfold."
Agriculture
The executive order directs the USDA to take steps to empower farmers, helping them access markets and compete with large corporations.
"The markets for seeds, equipment, feed, and fertilizer are now dominated by just a few large companies, meaning family farmers and ranchers now have to pay more for these inputs. For example, just four companies control most of the world’s seeds, and corn seed prices have gone up as much as 30% annually. Consolidation also limits farmers’ and ranchers’ options for selling their products," said the factsheet.
The order also encourages the FTC to keep big equipment manufacturers from blocking farmers' ability to fix their own tractors.
Internet service
Biden is encouraging the Federal Communications Commission to take action in an effort to reduce the cost of internet service and give consumers more options.
The order calls on the FCC to:
Prevent ISPs from making deals with landlords that limit tenants’ choices.
Revive the “Broadband Nutrition Label” and require providers to report prices and subscription rates to the FCC.
Limit excessive early termination fees.
Restore Net Neutrality rules undone by the prior administration.
Banking and consumer finance
The White House is calling for greater scrutiny of banking mergers, urging the DOJ and financial regulators to update their guidelines.
"Excessive consolidation raises costs for consumers, restricts credit for small businesses, and harms low-income communities. Branch closures can reduce the amount of small business lending by about 10% and leads to higher interest rates," said the factsheet. "Even where a customer has multiple options, it is hard to switch banks partly because customers cannot easily take their financial transaction history data to a new bank."
The order encourages the CFPB to issue rules allowing customers to download their banking data and take it elsewhere.
Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C.
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