A Competition Platform for 2020

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The 2020 presidential election is already well underway. Democratic candidates are laboring to differentiate themselves. The renewed interest in antitrust enforcement presents itself as the perfect opportunity for candidates to do so. 2

I certainly applaud Senators Warren’s recently released proposal to break up big tech, 3 but given the breadth of antitrust and the effects of its enforcement, even her proposal requires a broader plan.

While this list of recommendations is not comprehensive, this post aims to provide a clear set of policy positions that candidates can adopt to reinvigorate competition, enhance the rights of workers, and maximize enforcement.

Maximize Antitrust Enforcement and Ensure Competitive Markets for Workers

1) Reverse the Pleading Standard.

Regardless of its perceived limited effect, 4 candidates should encourage the passage of legislation that will revert the pleading standard for federal civil cases back to the original and long-standing interpretation under Conley v. Gibson. Antitrust litigation, particularly private enforcement, already has rigorous evidentiary burdens. It is unnecessary to incorporate additional burdens, especially before the commencement of litigation. 5

2) Amend Section 5 of the FTC Act to Include a Private Right of Action.

Section 5 of the Federal Trade Commission Act prohibits “unfair methods of competition” and “unfair or deceptive acts” in commerce. 6 State consumer protection laws are often inadequate to redress consumer harm. Perhaps the most straightforward policy would be to enable citizens to access the broad enforcement regime of Section 5 through enacting a private right of action. 7 Providing a private right of action would also lessen the effect of flattening or declining budgets of the FTC.

3) Hire Additional Enforcement Personnel

Antitrust enforcement is notoriously expensive 8 and lengthy. 9 Staff shortages limit the ability of the agencies to conduct antitrust litigation and respond adequately to the army of attorneys corporations have at their disposal. Candidates must advocate for dramatically increasing the budget and the number of attorneys at the Department of Justice and the Federal Trade Commission. 10

4) Abolish Arbitration.

While there was a time that certain federal courts dismissed arbitration clauses for antitrust claims, as they believed the antitrust laws were “of a character inappropriate for enforcement by arbitration.” 11 The Supreme Court has subsequently rejected that position. 12 Arbitration weakens (or outright prevents) the ability of private individuals from being able to enforce our antitrust laws. Since public enforcement is in part incentivized by the vigor of private enforcement, a policy that inhibits private enforcement invariably weakens public enforcement. 13 The next administration should seek to fully repeal the Federal Arbitration Act – particularly since the Supreme Court continues its endeavor to allow arbitration in nearly every aspect, which denies millions of people their day in court. 14  

5) Prohibit Non-Competes.

Thirty million works are currently affected by non-competes and are often attached as a condition of a person’s employment. Candidates should encourage the Federal Trade Commission, through its rule-making authority, to prohibit non-competes as a violation of the Sherman Act. 15

6) Rigorously Scrutinize Occupational Licensing Requirements.

Occupational licenses can provide confidence in the market and possibly increase the quality of products and services. 16 However, occupational licenses can also restrict labor mobility and can be imposed in seemingly arbitrary ways, thus increasing barriers to entry for workers. 17

7) Vigorously Pursue Monopolization Enforcement.

The last monopolization case pursued by the government was against Microsoft in 2001. 18 Meanwhile, there is mounting evidence that countless markets have become exceptionally concentrated. 19 The next administration should reinvigorate its antitrust approach and vigorously engage in monopolization enforcement – particularly against the technology goliaths (Google, Apple, Facebook, Amazon, and Microsoft). 20

Merger Review

1) Update Vertical Merger Guidelines.

Numerous scholars have indicated that the Vertical Merger Guidelines are woefully out of date and inept at properly preventing anticompetitive vertical mergers – the latest example being the AT&T-Time Warner. The next administration should start from scratch and develop a clear set of guidelines that allow out agencies to properly prevent vertical mergers that are anticompetitive and stays faithful to the explicit text of the Clayton Act that prohibits mergers whose effects “may be substantially to lessen competition, or to tend to create a monopoly.” 21

2) Enact a Conglomerate Merger Statute and Guidelines.

As many of the technology goliaths expand into countless markets, antitrust enforcers should seek to bring conglomerate merger litigation against their actions. Additionally, the next administration should seek to enact explicit conglomerate merger legislation and guidelines that can adequately codify the processes, procedures, and enforcement principles of conglomerate enforcement to ensure competitive markets.

3) Retrospective Merger Review.

The literature is clear that most claimed merger efficiencies do not bear any fruit or are exaggerated. 22 Antitrust agencies should be provided funds and statutory authority to conduct retrospective merger review studies to ensure that claimed merger efficiencies are actually implemented and adjust antitrust enforcement procedures as well as the pursued remedies based on the results. 23

4) Incorporate Labor Market Considerations into Antitrust Analysis.

Antitrust scholars and labor economists have brought significant recognition to the labor effects of low competition. 24 Merger review and antitrust enforcement more generally should incorporate various labor market variables including the impact of employment terms, worker mobility, and worker concentration into the analysis. 25