Those who have borne witness to rapid shifts in thinking about monopoly power in America knew it was no lip service. After years confined to quiet discussions among academics and economists on the margins of mainstream debate, the 21st-century anti-monopoly movement is now upon us. And with swelling public support, it has risen to prominence in ways that were unthinkable even five years ago.
Concerns over corporate power are now firmly embedded in Congress. Democrats Klobuchar and Rep. David N. Cicilline (R.I.) are perched at the forefront of the battle as chairs of congressional antitrust panels, but Republicans, longtime defenders of big business, are also coming around. Rep. Ken Buck (R-Colo.) and Sen. Josh Hawley (R-Mo.) have publicly backed breaking up giant tech companies such as Amazon and Google. A 16-month investigation and a blockbuster, 450-page report from the House Judiciary Committee accused Big Tech of monopoly abuses. In response to that investigation and other revelations, those Judiciary Committee members introduced and this week passed five groundbreaking antitrust reform bills that would break up and regulate Amazon, Google, Facebook and Apple and drastically limit their ability to grow through mergers. In both parties, the ground beneath the political consensus is shifting. (Amazon chief executive Jeff Bezos owns The Washington Post.)
The Biden administration has appointed two ardent anti-monopolists to official positions. Tim Wu, a former FTC official and prominent critic of Big Tech, in March accepted an appointment to the National Economic Council, where he’ll advise the administration on technology and competition matters. Later that month, Biden nominated Khan to join the FTC — the agency with the power to democratize our monopolized economy. Khan’s background and scholarship suggest that, as chair, she could be the most important and forceful American trustbuster since the New Deal.
The new anti-monopoly fervor in Washington began, and continues, in communities across America. Union workers have fought against telecom giant Verizon’s partnership with big cable companies to promote and sell each other’s services, saying it would lead to “market domination by an unregulated telecom behemoth.” Voters in North Dakota have backed independent pharmacies rather than allowing powerful chain stores and their predatory middle men to put local drugstores out of business. Elected officials in multiple cities and towns have banned exploitative dollar stores, which prey on low-income communities and force locally owned grocery stores to shutter.
Enacting sweeping reforms — especially ones that will increase regulations after decades of anti-regulation zeal — is difficult work, and there’s no guarantee the anti-monopoly movement will succeed in its goals of changing the law and increasing enforcement. But the substantial progress so far represents a remarkable series of leaps forward, especially given how entrenched pro-corporate philosophies have been in American politics.
To arrive at this moment, policymakers and the public have had to forcefully challenge an economic concept that had become canonical in America. The consumer welfare standard, as it is known, rose to prominence in the 1970s and ’80s alongside policies that favored corporate concentration and organized capital, including the decimation of organized labor and the rapid deregulation of banking, airlines and other industries. The standard made low consumer prices the singular goal of antitrust laws, regardless of whether a merger or a corporation’s actions harmed workers, small businesses or democratic values. The standard sounded like a good deal: So long as short-term prices remained low for consumers, anything a company wanted to do should be allowed; after all, who doesn’t like low prices?
A 1978 book, “The Antitrust Paradox,” by former solicitor general Robert Bork, indoctrinated a generation of lawyers, economists, enforcers and judges into the cult of the consumer welfare standard. First in the federal courts and then in the halls of government, the standard guided how the economy is regulated and structured — and how it isn’t. Enforcement of anti-monopoly laws became unmoored from Congress’s intent in the 1890 Sherman Antitrust Act and in later legislation: that the laws work as a democratic antidote to unrestrained corporate power.
That approach had sweeping consequences. A decade ago, the greed of a few megabanks caused global economic calamity, as a housing bubble led to the Great Recession. Americans were furious. In response to the crisis, President Barack Obama and Congress bailed out the big banks to stave off collapse, while allowing millions of Americans to lose their homes and their life savings. As policymakers propped up Wall Street banks in public — rightfully earning the scorn of millions — behind the scenes they permitted monopoly power to grow in tech, agriculture and scores of other industries. Obama promised to tackle corporate power in our food system, then did nothing — even after farmers and ranchers detailed how agriculture monopolies robbed them of their livelihoods. Staff at the FTC recommended that the agency’s leadership sue Google over its alleged attempts to dominate the mobile search market in the United States; the agency took no action, allowing Google’s stranglehold on the Internet to grow. Facebook bought Instagram and WhatsApp with no resistance from the government. Amazon expanded its empire through unchecked mergers, one after the other.
But by Obama’s second term, the evidence that unbridled corporate power was poisoning the economy began to pile up. Scholarly papers detailing the relationship between business concentration and inequality bubbled up to the mainstream. The Wall Street Journal, a reliable barometer of American economic trends, detailed the troubling rise and effects of corporate consolidation. The Obama White House, after ignoring or embracing corporate power well after the bank bailouts, began producing reports critical of extreme concentration in the economy, and it ordered civil officials to search for competition problems. After detailing the increase in economic inequality, the Economist proclaimed the drive for more competitive industries “the next capitalist revolution.”
In 2016, Sen. Elizabeth Warren (D-Mass.) stepped to the dais in a crowded room at the National Press Club and gave what would become a defining speech in the rising anti-monopoly movement. “Concentration threatens our markets, it threatens our economy, and it threatens our democracy,” she said. That same year, when Bayer, the multibillion-dollar agriculture and health conglomerate, pushed to buy American agriculture giant Monsanto, it was clear that the backlash against corporate bigness had percolated elsewhere on Capitol Hill as well. Yes, longtime corporate-power critic Sen. Bernie Sanders (I-Vt.) lambasted the deal; but so did Klobuchar and Sen. Mike Lee (R-Utah) — lawmakers from two different parties whose views at the time ranged from moderate to conservative. “The transaction has the potential to result in a significant loss of competition,” Lee said, stifling innovation and raising prices. The merger was ultimately approved. But that deal and others, such as T-Mobile’s 2019 takeover of rival Sprint, Google’s $2.1 billion purchase of Fitbit, and Amazon’s recent plan to acquire MGM, have been met by demands for a more democratic, equitable antitrust philosophy that hews to Congress’s original intent.
State and federal regulators have already moved in the direction of more vigorous anti-monopoly enforcement and policy. All 50 state attorneys general, watchdogs of their local economies, launched a broad investigation of Google’s power over digital advertising markets in the fall of 2019; a year later, the Justice Department and state enforcers sued the search titan, claiming it had broken antitrust law by entering into exclusive contracts with phone makers, Web browsers and others to ensure that Google was the default choice when customers searched the Internet or asked for directions. Two months later, the FTC sued to break up Facebook over its acquisitions of Instagram and WhatsApp, which the commission says killed real competition in the social media industry that Facebook now dominates. Both lawsuits are ongoing; Facebook has asked a judge to dismiss the FTC’s case. Meanwhile, D.C. Attorney General Karl A. Racine last month sued Amazon over anti-competitive clauses in its contracts with third-party sellers, and Ohio sued Google, aiming to end its self-preferencing by making it a public utility.
Alongside legislation in the Senate to fortify antitrust laws, Cicilline and other lawmakers this month introduced a collection of bipartisan bills in the House that would follow through on recommendations of the antitrust subcommittee he chairs. The keystone bill in the package would implement “structural reforms” among the big tech companies, forcing the companies to spin off some parts of their businesses as the only surefire way to end conflicts of interest that have harmed independent firms and consumers. Two of the bills — the breakup bill and another aimed at ending their ability to preference or steer users to their own products and services — mirror past laws that restricted the ways corporations could be organized, including the 1933 Glass-Steagall Act, which for decades separated commercial and investment banking. Other bills would rewrite merger laws to prevent further concentration in tech and increase the budgets of the antitrust agencies. The House Judiciary Committee passed the bills last week, with a bipartisan collation that included Buck, Florida Republican Rep. Matt Gaetz and others; they next go to the full House for debate. In all, the mission to break monopoly power is on its way.
The big tech companies contend that they don’t operate monopolistically. Google, for example, has insisted that consumers get to decide which company’s services they want to use. Amazon argues that it actually makes up a small fraction of the total retail market and that enhanced antitrust regulation would make things worse for consumers. Facebook claims that its acquisitions of other apps and services are just “part of every industry.” And Apple has pushed back against lawmakers’ claims that it uses its App Store “as a weapon against competitors,” among other allegations.
For those who oppose corporate dominance, there is difficult work ahead. Giant corporations remain absurdly wealthy, able to tap into a nearly endless stream of Wall Street capital to prop up their power. They donate to lawmakers and their political parties, which remain largely beholden to their corporate benefactors. Lawmakers from both parties have resisted antitrust reforms, among them a coalition of House Judiciary Committee members that includes California Democrat Zoe Lofgren and Republican Darrell Issa. But Democrats appear to be largely on board with reforming and enforcing anti-monopoly laws, and some Republicans at the moment are invested in breaking up the tech companies — especially after Facebook’s oversight board upheld its ban of former president Donald Trump. But whether a majority of lawmakers are willing to overhaul the law to fight corporate power throughout the economy is a significant question.
Even if new laws are passed and new rules promulgated, pitfalls abound. Big corporations can and do hire armies of lawyers and economists to fend off lawsuits and regulatory action. Judges who support a narrow reading of anti-monopoly laws have lifetime appointments to the bench. The Supreme Court, reshaped by the Trump administration, is deeply conservative and pro-corporate. Any legislation will have to give specific and clear direction to judges, or remove decisions from their hands, if monopoly enforcement is going to rise to match this moment.
But it’s hard to stop a popular movement. The country’s collective uprising against corporate bigness a decade ago has now been embraced by policymakers across political lines, all the way to the White House. Corporate power affects all it touches, from the prices we pay at the store to our ability to read the local news and earn a decent wage. It won’t go without a fight. The muscles America has traditionally used to fight corporate power have atrophied over the past half-century — yet they’ll grow stronger with exercise. For the first time in decades, the time has come to use them.