President Biden Signs Sweeping Executive Order to Promote Competition
Antitrust enforcement in the United States could be reinvigorated to an extent not seen in decades as a result of President Biden’s sweeping executive order on “Promoting Competition in the American Economy” (the “Order”), which aims to enhance business competition, curb corporate dominance, and provide consumers and workers more choices and benefits across various industries ranging from agriculture to healthcare.
The Order, which President Biden signed on July 9, 2021, directs federal agencies to crack down on anticompetitive practices and concentrated markets. During the signing, President Biden asserted that “capitalism without competition isn’t capitalism; it’s exploitation.”
The White House also provided a Fact Sheet stating that the Order “established a whole-of-government effort to promote competition in the American economy.” It includes 72 initiatives to be undertaken by a number of federal agencies to address a wide range of competition issues. The Order affirms that one of President Biden’s policies is to “enforce the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony” in various markets.
Accordingly, antitrust plays a critical role in the Administration’s efforts to promote economic competition. As stated in the Order, the antitrust laws are a “first line of defense” against the monopolization of the American economy and federal antitrust enforcement agencies are encouraged to focus their efforts on competition issues in key markets and enforce antitrust laws “fairly and vigorously.” The Order recommends that enforcement should focus in particular on labor markets, agriculture, healthcare, and the tech sector.
The Order’s Wide-Ranging Recommendations
The Order includes initiatives for federal agencies to address systematic and comprehensive competition issues. For example, one of the most significant recommendations related to the labor markets is the Administration’s proposal encouraging the Federal Trade Commission (“FTC”) to ban or limit non-compete agreements between employers and employees using its rulemaking authority pursuant to the FTC Act. Non-compete agreements generally require employees to agree to not work for a competing company within a specified time period and defined region. The Order also encourages the FTC and the U.S. Department of Justice to strengthen antitrust guidance to prevent employers from sharing wages and benefit information in a manner that suppresses wages or reduces benefits.
The Order contains robust proposals for the healthcare industry, including measures related to hospitals, pharmaceuticals, and health insurers. It directs the U.S. Department of the Health and Human Services Administration (“HHS”) to increase support for generic and biosimilar drugs and to issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging. The Order also encourages the FTC to exercise its rulemaking authority to address unfair anticompetitive conduct or agreements in the prescription drug industries, such as those that delay entry of generic drugs or biosimilars. In addition, HHS is directed to support existing hospital price transparency rules and to finish implementing bipartisan federal legislation to address surprise hospital billing.
The Order also takes aim at agriculture—another critical industry that has become more concentrated and less competitive. As noted in the Order, “[f]armers are squeezed between concentrated market power in the agricultural input industries—seed, fertilizer, feed, and equipment suppliers—and concentrated market power in the channels for selling agricultural products.” The Order highlights several competition issues that are important for small and independent farmers, including those related to the labeling of products and the right to repair. Moreover, the Order directs the U.S. Department of Agriculture to consider issuing new rules to make it easier for farmers to bring and win claims, preventing exploitation of farmers, and adopting anti-retaliation protections for farmers who speak out about bad practices.
Formation of The White House Competition Council
Notably, the Order establishes a new White House Competition Council (the “Council”), which will be led by the Director of the National Economic Council, to monitor progress with the measures and recommendations included in the Order. The Council will be tasked with coordinating, promoting, and advancing federal government efforts to address overconcentration, monopolization, and unfair competition in the American economy.
The Council will be led by the Assistant to the President for Economic Policy and Director of the National Economic Council, who will serve as the Chair of the Council. It will consist of representatives from various federal agencies, including the Secretary of the Treasury, the Secretary of Defense, the Attorney General and will invite the participation of the FTC Chair as well as several other independent agencies. The Council will meet on a semi-annual basis unless the Chair determines that a meeting is unnecessary.
With the issuance of this Order, President Biden engages in a major push aimed at boosting competition in the U.S. economy as well as lowering prices for consumers and increasing wages for workers. However, although President Biden’s agenda is clear, the Order is not self-executing as it does not impose any new laws or regulations. Therefore, the Administration’s success will depend on how the Order influences enforcement of the antitrust laws by the Justice Department and the FTC, along with the extent to which federal agencies implement the recommendations included in the Order.
Individuals and organizations should contact antitrust counsel with any questions concerning the potential impact of the Order and other recent developments in this area, including proposed federal and state antitrust legislation.
Edited by Gary J. Malone
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