Overview
President Biden’s unprecedented July 9, 2021, Executive Order 14036 represents a potential watershed moment in U.S. competition policy. The wide-ranging Executive Order (EO) includes 72 initiatives that aim to enforce existing antitrust laws and other consumer protection regulations, to be undertaken by at least 15 federal departments, offices, and agencies. The Biden Administration’s stated hope is that these efforts will drive down prices for consumers, increase wages for workers, and facilitate innovation.
The EO establishes a White House Competition Council, calls for more rigorous antitrust enforcement by the Department of Justice (DOJ) and the Federal Trade Commission (FTC), and seeks new consumer protection regulations through a host of regulatory agencies. The EO identifies “the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony,” as problems to be addressed. While the initiatives set forth in the EO apply to every sector of the economy, it particularly targets the technology, banking and financial services, healthcare, internet service, transportation, and agriculture industries.
The EO calls on the DOJ and FTC, as well as other agencies with enforcement authority, to enforce the antitrust laws “fairly and vigorously.”
The DOJ and FTC are encouraged to review the horizontal and vertical merger guidelines, and FTC Chair Lina Khan and the Acting Assistant Attorney General for Antitrust Richard Powers have already issued a joint statement promising soon to “jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law.” With regard to merger and acquisition activity, the EO also “reaffirms that the United States retains the authority to challenge transactions whose previous consummation was in violation of the [antitrust laws.]”
More generally, the EO calls for a “whole-of-government” approach to more aggressively enforcing the antitrust laws and directs or encourages a number of federal agencies to take a more interventionist role in regulating competition. Where there is overlapping jurisdiction over particular cases, conduct, transactions, or industries, agencies are encouraged to coordinate their efforts with respect to: (i) the investigation of conduct potentially harmful to competition; (ii) the oversight of proposed mergers, acquisitions, and joint ventures; and (iii) the design, execution, and oversight of remedies. The means of cooperation in cases of overlapping jurisdiction should include: sharing relevant information and industry data; in the case of major transactions, soliciting and considering the views of the Attorney General or the FTC, as applicable; and cooperating with any concurrent Department of Justice or FTC oversight activities under the Sherman Act or Clayton Act.
FTC Asked to Address Major Technology Company Practices
In addition to considering revisions to the horizontal and vertical merger guidelines, two of the most prominent requests of the FTC are apparently aimed at “Big Tech” companies. Specifically, the EO asks the FTC to “address persistent and recurrent practices that inhibit competition” with regard to unfair data collection and surveillance processes, which “may damage competition consumer autonomy, and consumer privacy,” as well as “unfair competition in major Internet marketplaces.”
Additional regulatory requests are for the FTC to address: unfair occupational licensing restrictions; unfair anticompetitive restrictions on third-party or self-repair of items; unfair anticompetitive prescription drug industry conduct or agreements, including agreements to delay the market entry of generics and biosimilars; unfair tying or exclusionary practices in the brokerage or listing of real estate; as well as “any other unfair industry-specific practices that substantially inhibit competition.”
The FTC is also asked to consider rulemaking to curtail the “unfair use of non-compete clauses” and other contractual provisions that may unfairly limit worker mobility. Related to this request is the suggestion that the FTC consider working with the Department of Justice to consider revising the Antitrust Guidance for Human Resource Professionals.
DOJ to Consider IP/Antitrust Issues
In addition to being asked to work with the FTC in potential revisions to the merger guidelines, and the Antitrust Guidance for Human Resource Professionals, the DOJ is encouraged to engage in additional actions. DOJ is encouraged, together with the Secretary of Commerce, to consider revisions to their position on the intersection of IP and antitrust law, including by considering revisions to the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. Finally, DOJ is encouraged, in consultation with the Fed Chairman, FDIC Chairperson, and Comptroller of the Currency, to adopt a plan for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act.
The initiatives set forth in the Executive Order, combined with the appointments of Lina Khan as FTC Chair and Tim Wu to the National Economic Council, are the latest and strongest indications that the Biden Administration is committed to the most vigorous enforcement of the antitrust laws since prior to the election of President Reagan. Companies that may be affected by potential regulatory changes should consider submitting comments during the various agency public comment periods. We will continue to monitor these developments and their implications for business and report on them here and in the Steptoe Executive Order on Competition Tracker, but we seem to be headed to a very different day in the antitrust world.
