At a recent Senate Judiciary Antitrust Subcommittee oversight hearing, the Biden administration’s top antitrust enforcers went far beyond asking Congress for more money to continue their hawkish enforcement game plan. DOJ’s assistant attorney general for antitrust, Jonathan Kanter, and FTC’s chair, Lina Khan, also asked Congress to pass legislation that would considerably reform existing antitrust laws. Unfortunately, the bills in consideration are subpar compared to what’s currently in the books.
In his oral and written testimony to the Senate, Kanter expressed his strong support for a number of bills currently being considered by Congress, including Senator Klobuchar and Senator Grassley’s American Innovation and Choice Online Act (AICOA), the Merger Filing Fee Modernization Act and the Open App Markets Act. But contrary to what Kanter suggests — that these bills would enable the agencies to better protect Americans from anticompetitive conduct — the pieces of legislation threaten to achieve the exact opposite and harm consumers.
AICOA, which would prohibit a number of technology platforms from giving their own products and services preferential treatment, has so far received significant negative traction from consumer advocates for being anti-consumer, anti-enterprise and anti-innovation. Despite the endless evidence pointing to the negative consequences of enacting the bill, those in favor of the bill are blatantly dismissing warnings that it threatens to seriously undermine consumer welfare. “By identifying and prohibiting the worst kinds of discriminatory and self-preferencing conduct, the bill would enhance the ability of the DOJ to challenge that conduct effectively and restore competition in digital markets,” Kanter argues in his written testimony. His argument, however, rests on two faulty premises that are not corroborated by empirical evidence and only further politicize antitrust.
First, it assumes that self-preferencing is an anti-competitive practice — completely overlooking the fact that self-preferencing is a common practice across all industries where companies may promote their own private labels, resulting in lower prices and services for consumers. What Kanter’s argument misses is that promoting store-brand products and services is not illegal under the current law, and there’s no reason for that to change. The practice tangibly benefits consumers.
Instead of saving consumers from “harms” like free two-day shipping, product comparisons and easily accessible reviews, Congress and antitrust enforcers should seek to foster innovation and promote consumer welfare.
Like AICOA, the Merger Filing Fee Modernization Act threatens to cause negative consequences if enacted. According to Kanter, the bill will help the DOJ protect consumers from anticompetitive conduct by updating merger filing fees. While the bill will undoubtedly increase FTC’s and DOJ’s appropriations, it would also discourage mergers and acquisitions, to the detriment of American small businesses and consumers. To make matters even worse, it would provide resources to activists that have shown an eagerness to pursue a political agenda without giving Congress appropriate oversight over how the antitrust agencies will use their increased resources. As of now, the bill has passed the House.
The Open App Markets Act could have similarly damaging consequences. Contrary to what Kanter suggests — that the bill would ensure that independent app developers can compete on fair and equal terms — the bill will achieve the exact opposite. It would decrease consumers’ choice and the quality of products and services, increase costs for consumers, and even risk consumer data security.
While we can expect Kanter and Khan to continue their aggressive push to overhaul this country’s approach to antitrust, their approach is not just unorthodox. It’s flat-out deceptive, especially for consumers.
Krisztina Pusok is the Director of Policy and Research at the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.