Biden's Executive Order Targets Big Tech Mergers & ISPs

A New Push for Economic Competition

The Biden administration has unveiled a comprehensive initiative designed to stimulate competition within several key sectors of the U.S. economy, with a particular focus on the technology industry, through executive action.

Addressing Corporate Consolidation

According to a recent White House fact sheet, President Biden is taking firm steps to counteract the increasing trend of corporate consolidation. The goal is to foster greater competition and provide tangible benefits to consumers, workers, farmers, and small businesses across the nation.

Whole-of-Government Approach

This order initiates a broad, “whole-of-government” strategy. It involves more than twelve federal agencies working together to regulate monopolies, safeguard consumers, and address potentially harmful practices by some of the world’s largest corporations.

Empowering Antitrust Agencies

The White House plans to directly address issues related to big business at the federal level. This will largely be achieved by strengthening the capabilities of the Federal Trade Commission (FTC) and the Justice Department – both agencies possessing antitrust enforcement authority.

Revisiting Past Mergers

A significant aspect of this initiative involves the potential to challenge mergers that were previously approved by past administrations. The White House asserts that these agencies have the legal basis to potentially unwind acquisitions that have contributed to the dominance of a few large tech companies.

Focus on Internet Platforms

Federal scrutiny will be heavily directed towards “dominant internet platforms.” Particular attention will be given to the acquisition of emerging competitors, repeated mergers, data accumulation, the impact of “free” services, and concerns regarding user privacy.

Companies on Notice

Facebook, Google, and Amazon are specifically identified as being under heightened scrutiny. However, Apple is also unlikely to be exempt from federal oversight.

‘Killer Acquisitions’ Under Review

Over the last decade, major tech platforms have acquired numerous companies, including those suspected of being “killer acquisitions” – purchases intended to eliminate potential competitive threats. The White House contends that many of these acquisitions haven’t been adequately reviewed or blocked by federal agencies.

Challenging Acquisition Defenses

Large tech companies have traditionally defended their acquisition strategies by arguing that past approvals should preclude future legal challenges. The Biden administration’s executive order clearly rejects this argument.

Internet Service Provider Scrutiny

The White House is also targeting internet service providers. The FCC is directed to prioritize consumer choice and implement broadband “nutrition labels” detailing speed limitations and hidden fees. This initiative was initially started during the Obama administration but later abandoned.

Restoring Net Neutrality

The order also calls for the FCC to reinstate net neutrality rules, which were repealed in 2017, sparking opposition from advocates of an open internet and much of the tech sector.

Enhanced Privacy Regulations

The FTC will be tasked with developing new privacy rules to protect consumers from surveillance and the extensive collection of personal data. This is particularly relevant to free services like Facebook and YouTube, which rely on data collection to build their businesses.

Protecting Smaller Businesses

The FTC will also be directed to create rules that prevent large platforms from unfairly leveraging their market dominance to outcompete smaller businesses through data-driven surveillance.

Right-to-Repair Rules

The executive order encourages the FTC to establish “right-to-repair” rules. These rules would empower consumers to perform their own repairs or utilize third-party repair services, reducing restrictions imposed by manufacturers.

New White House Competition Council

A new White House Competition Council, led by the Director of the National Economic Council, will oversee the implementation of the proposals outlined in the order.

Alignment with FTC and Congressional Efforts

This executive branch effort aligns with ongoing actions within the FTC and Congress. Lina Khan, a prominent antitrust advocate and critic of Amazon, now chairs the FTC.

Bipartisan Legislative Initiatives

Congress is currently considering a series of bipartisan bills aimed at regulating the tech industry. These legislative efforts seek to modernize antitrust laws to address the challenges posed by large, internet-based businesses.

Congressional Support

Senator Amy Klobuchar, a leading voice on tech antitrust issues in Congress, expressed support for the executive order, emphasizing the need for both legislative updates and a reimagining of government’s role in promoting competition.

Addressing Market Dominance

The White House argues that increasing corporate consolidation across industries like healthcare, agriculture, and technology has negatively impacted economic growth, innovation, and income equality.

The Impact of Reduced Competition

The administration asserts that inadequate competition hinders economic growth and innovation, leading to slower productivity, reduced investment, and widening income and wealth disparities.