Executive Order on Promoting Competition in the American Economy

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President Joseph R. Biden signed his Executive Order on Promoting Competition in the American Economy on July 9, 2021. His goal: to promote a fair, open, and competitive marketplace to give entrepreneurs, consumers, and workers more economic power.

The president backed up his intent to return to the antitrust traditions of Presidents Franklin and Teddy Roosevelt in a tweet following the signing ceremony:

Let me be clear: capitalism without competition isn’t capitalism. It’s exploitation.

— President Biden (@POTUS)
July 9, 2021

Key Takeaways

  • President Biden’s July 9, 2021, Executive Order on Promoting Competition in the American Economy concentrates on promoting competitive markets through 72 initiatives directed at more than a dozen federal agencies.
  • Areas covered include healthcare, internet services, big tech, labor, transportation & shipping, agriculture, and banking & finance.
  • According to the White House, this order will, through a “whole-of-government” approach, drive down prices for consumers, increase wages for workers, and facilitate innovation.
  • Critics worry about overreach on the part of government and consolidation of government power.
  • The order contains both actionable directives and outreach to agencies that don’t fall directly under the president’s supervision.

The order addresses what Biden sees as anti-competitive problem areas in a variety of American industries due to consolidation. This, along with government inaction, has resulted in “widening racial, income, and wealth inequality,” according to the president.

Not everything in the President’s Executive Order on Promoting Competition in the American Economy is an “order.” Words such as “calls on” and “directs” indicate mandatory action is required. “Encourages” and “urges” suggest a softer push for action.

What’s Mandatory and What’s Not

The designation “Executive Order” suggests a presidential directive that must be followed. In fact, executive orders are not defined by the U.S. Constitution. This has led to confusion about how they can be used and to which parts of government they apply.

According to the Federal Register, “The President of the United States manages the operations of the Executive branch of Government through Executive orders.” Important caveats apply. Executive orders have the effect of law provided they are “based on powers granted to the President in the Constitution and … consistent with those authorities.

Historical disagreements about the legality of certain executive orders abound. Typically, the disagreements revolve around charges of “presidential overreach” or “legislation by fiat.” This has led to the practice of judicial review of executive orders. If the court determines the president lacked authority or that the order is unconstitutional, it is struck down.

The Cabinet-level agencies in the executive branch of government subject to executive orders are: the departments of Agriculture (USDA), Commerce, Defense, Education, Energy, Health and Human Services (HHS), Homeland Security, Housing and Urban Development (HUD), Justice (DOJ), Labor, State, Interior, Treasury, Transportation, and Veterans Affairs (VA).

President Biden’s wide-ranging executive order on competition in the marketplace uses a combination of mandatory (directs) and softer (encourages) language to prod federal agencies to adopt policies designed to push back against corporate consolidation (mergers) and practices the White House sees as anti-competitive.

Promoting Competition in the American Economy

Officially known as Executive Order (EO) 14036, the 13-page document contains 72 initiatives directed at more than a dozen federal agencies. What follows is a summary of the key parts of the order.

Section 1. Policy

Section 1 lays out and expands on the Biden administration’s stated policy to enforce antitrust laws to address the impacts of what it sees as an excessive concentration and abuse of power related to labor markets, agricultural markets, Internet platform industries, healthcare markets, repair markets, and other U.S. markets directly affected by foreign cartels.

Section 2. The Statutory Basis of a Whole-of-Government Competition Policy

This section lays out the rationale for what the administration sees as the need for a whole-of-government approach to driving down prices for consumers, increasing wages for workers, and facilitating innovation in the marketplace. Further, according to Biden, “Such an approach is supported by existing statutory mandates. Agencies can and should further the policies set forth in…this order.”

Section 3. Agency Cooperation in Oversight, Investigation, and Remedies

In Section 3 of the EO, the administration encourages federal agencies to coordinate enforcement efforts when it comes to antitrust laws and specifically calls on the DOJ and Federal Trade Commission (FTC) to enforce existing laws within their jurisdiction as “vigorously” as possible. The EO further stipulates that agencies should concentrate on labor markets, agricultural markets, healthcare markets, and the tech sector.

Section 4. The White House Competition Council

In this section, EO 14036 establishes a White House Competition Council to coordinate the White House response to anticompetitive behavior. It also set response deadlines for various agencies members. Members of the White House Competition Council include:

  • Secretary of the Treasury
  • Secretary of Defense
  • Attorney General
  • Secretary of Agriculture
  • Secretary of Commerce
  • Secretary of Labor
  • Secretary of Health and Human Services
  • Secretary of Transportation
  • The administrator of the Office of Information and Regulatory Affairs
  • Heads of other agencies when invited to participate

Section 5. Further Agency Responsibilities

The EO further directs all named agencies to consider using their authority to promote policies laid out in Section 1 of the order. Key EO 14036 initiatives by sector are outlined below.

Agriculture

  • Recommends the United States Department of Agriculture (USDA) issue rules under the Packers and Stockyards Act to allow farmers to more easily bring claims regarding bad practices.
  • Calls on USDA to issue a plan to increase opportunities for farmers to access markets within 180 days and to issue a report on the effect of retail concentration on competition in the food industries within 300 days.
  • Directs the USDA to ensure the intellectual property system encourages innovation and avoids reducing competition in seed and other input markets.
  • Calls on the Federal Trade Commission (FTC) to restrict manufacturers from limiting an individual’s ability to use independent repair shops or repair their own equipment.
  • Calls on the FTC and DOJ to evaluate mergers in agriculture markets.
  • Urges the USDA to consider stricter rules for when meat can use “Product of USA” labels.

Banking and Finance

  • Calls on the Consumer Financial Protection Bureau (CFPB) to develop rules allowing customers to port their banking data.
  • Directs the Attorney General, within 180 days, to review current practices and adopt a plan for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act of 1956.
  • Urges the Justice Department and other agencies to update guidelines on banking mergers.

Big Tech

  • Outlines a policy of greater scrutiny of mergers, especially by dominant Internet platforms.
  • Encourages the FTC to issue rules on surveillance and the accumulation of data, rules prohibiting unfair methods of competition on Internet marketplaces, and anticompetitive limits on utilizing independent repair shops.
  • Directs the Treasury Department to, within 270 days, submit a report examining the impact of competition by large tech firms and other nonbank companies on consumer finance markets.
  • Urges the FTC to create rules “barring unfair methods of competition” harmful to smaller businesses.
  • Encourages the FTC to curb cellphone manufacturers’ restrictions against repairs by independent shops.

Healthcare

  • Calls on the U.S. Department of Health and Human Services (HHS) to issue a plan within 45 days to combat high prescription-drug prices.
  • Calls for HHS, within 120 days, to consider rules to allow hearing aids to be sold over the counter.
  • Directs the Food and Drug Administration to help expedite imports of prescription drugs from Canada.
  • Encourages the Justice Department and Federal Trade Commission to revise guidelines for hospital mergers.
  • To continue to promote generic drug and biosimilar competition through a number of actions, including actions with FTC.
  • It calls on HHS to support existing hospital price transparency rules and to continue implementing legislation to address surprise billing.

Labor

  • Encourages the FTC to ban or limit the use of noncompete clauses and occupational licensing restrictions to limit workers’ mobility.
  • Encourages the FTC and the Justice Department to limit employers’ ability to share, with other businesses, wage and benefits data to suppress outlays to employees.
  • The EO notes that certain occupational licensing requirements restrict competition, and asks the FTC to ban “unnecessary” occupational licensing restrictions that restrict worker mobility.
  • It specifically calls out “labor markets” as markets that FTC and DOJ should consider in evaluating proposed mergers.
  • The Treasury Department is directed to, within 180 days, submit a report on the impact of the current lack of competition on labor markets.

Internet

  • Calls on the Federal Communications Commission (FCC) to halt the ability of Internet service providers (ISPs) to negotiate with landlords in order to limit tenants’ choices.
  • Urges the FCC to require providers to report prices and subscription rates to the FCC and to restrict “excessive” early termination fees.
  • Encourages the FCC to restore Obama-era Net Neutrality rules.
  • Pledges greater scrutiny of mergers by dominant internet platforms and the acquisition of smaller competitors.
  • Urges the FTC to establish rules on large platforms’ use of surveillance and gathering of user data.
  • Encourages the FTC to curb cellphone manufacturers’ restrictions against repairs by independent shops.
  • Encourages the FTC to ban or limit the use of noncompete clauses and occupational licensing restrictions to limit workers’ mobility.
  • Encourages the FTC and the Justice Department to limit employers’ ability to share wage and benefits data with other employers.

National Defense

  • Recommends the Department of Defense (DoD) submit a report assessing the state of competition within the defense industrial base.
  • Encourages DoD to develop a plan to avoid contract terms that limit the ability of DoD to repair its own equipment.

Transportation

  • Encourages DOT to consider rules and enforcement actions to enhance consumer access to flight information, including by new or lesser-known airlines.
  • Urges DOT to consider rules to ensure advertising, marketing, pricing, and charging of ancillary fees does not constitute an unfair or deceptive practice or unfair method of competition.
  • Directs the DOT to report to the White House Competition Council regarding progress with airlines providing refunds for flights canceled because of the COVID-19 pandemic.
  • Urges publication of a proposed rule requiring airlines to refund baggage fees when a passenger’s luggage is substantially delayed and when other ancillary fees are charged and the service is not provided.
  • Encourages the DOT to ensure that DOT facilitates innovation and competition in new aviation technologies (including unmanned aircraft systems).
  • Directs the chair of the Surface Transportation Board (STB) to take certain steps aimed at addressing industry consolidation and shipping prices.
  • Urges DOT to consider undertaking rulemakings to address other issues regarding competitive access, including bottleneck rates, interchange commitments or other matters.
  • Encourages DOT to ensure freight railroads are giving passenger rail access without unwarranted delays or interruptions consistent with existing federal law.
  • Directs the chair of the Federal Maritime Commission (FMC) to work with the other FMC commissioners to take certain actions to address high shipping costs resulting from various factors, including the consolidation of the global container shipping industry.

Section 6. General Provisions

The closing general provisions state that the order is subject to the law and availability of appropriations. Independent agencies not otherwise subject to the order are encouraged to comply. Finally, the order is not intended to create any benefit at odds with U.S. law.  



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Autore dell'articolo: Redazione EconomiaFinanza.net

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