President Biden has issued Executive Order (EO) 14036, “Promoting Competition in the American Economy,” with the goal of promoting competition within the U.S. economy to lower prices for families, increase wages for workers, promote innovation, and foster economic growth. The EO, signed on July 9, 2021, sets forth 72 initiatives for multiple federal agencies. These initiatives are designed to address competition issues that the administration has identified as contributing to the harmful trends associated with corporate consolidation, decreased competition, and ultimately harming America’s consumers, workers, farmers, and small businesses. The EO does not immediately establish new requirements; however, it is a call to action for federal agencies to review issues and establish policies to implement the administration’s goals.
In this alert, we detail at a high level how this EO seeks to effect change in the areas of labor and employment, health care and medicine, transportation, agriculture, technology, and defense procurement.
The EO establishes the White House Competition Council, led by the Director of the National Economic Council. The White House Competition Council is charged with monitoring the progress associated with the implementation of the EO’s initiatives and coordinating the federal government’s response to anticompetitive behavior that may be driven by large corporations in the economy. While the EO does not establish any immediate requirements for non-federal entities, it does require a number of federal agencies to establish policies in accordance with the EO and propose the necessary changes to implement the EO. These federal agencies are also required in a number of instances to submit reports to the White House Competition Council regarding the current competition landscape in specific markets.
The lengthy EO is organized into six sections: (1) Policy; (2) The Statutory Basis of a Whole-of-Government Competition Policy; (3) Agency Cooperation in Oversight, Investigation and Remedies; (4) The White House Competition Council; (5) Further Agency Responsibilities; and (6) General Provisions. Each section provides guidance to both the federal government and the private sector regarding the ways the Biden administration intends to increase competition and decrease the barriers that are perceived as inhibiting competitive behavior.
At the outset, the EO establishes and reaffirms a number of this administration’s policies related to competition and anticompetitive behavior. The EO affirms that it is the policy of the Biden administration to:
- Enforce existing antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony – especially as these issues arise in labor markets, agricultural markets, Internet platform industries, health care markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity.
- Enforce existing antitrust laws to meet the challenges posed by new industries and technologies, including the rise of the dominant Internet platforms, especially as they stem from serial mergers, the acquisition of nascent competitors, the aggregation of data, unfair competition in attention markets, the surveillance of users, and the presence of network effects.
- Challenge transactions whose previous consummation violated the Sherman Antitrust Act (26 Stat. 209, 15 U.S.C. 1 et seq.) (Sherman Act), the Clayton Antitrust Act (Public Law 63-212, 38 Stat. 730, 15 U.S.C. 12 et seq.) (Clayton Act), or other laws. See 15 U.S.C. 18; Standard Oil Co. v. United States, 221 U.S. 1 (1911).
- Promote competition and innovation in firms small and large, at home and worldwide in response to the rising power of foreign monopolies and cartels.
- Aggressively support legislative reforms that would lower prescription drug prices, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and through other related reforms.
- Support the enactment of a public health insurance option.
- Comply with the policy objectives stated in Executive Order 13725 of April 15, 2016 (Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy) and the principles that led to the passage of the Sherman Act; the Clayton Act; the Packers and Stockyards Act, 1921 (Public Law 67-51, 42 Stat. 159, 7 U.S.C. 181 et seq.) (Packers and Stockyards Act); the Celler-Kefauver Antimerger Act (Public Law 81-899, 64 Stat. 1125); the Bank Merger Act (Public Law 86-463, 74 Stat. 129, 12 U.S.C. 1828); and the Telecommunications Act of 1996 (Public Law 104-104, 110 Stat. 56), among others.
The EO details the 14 federal agencies that are charged with administering authorities associated with preventing anticompetitive behavior: (1) the Department of the Treasury, (2) the Department of Agriculture, (3) the Department of Health and Human Services (HHS), (4) the Department of Transportation (DOT), (5) the Federal Reserve System, (6) the Federal Trade Commission (FTC), (7) the Securities and Exchange Commission, (8) the Federal Deposit Insurance Corporation (FDIC), (9) the Federal Communications Commission (FCC), (10) the Federal Maritime Commission (FMC), (11) the Commodity Futures Trading Commission, (12) the Federal Energy Regulatory Commission, (13) the Consumer Financial Protection Bureau (CFPB), and (14) the Surface Transportation Board (STB). These agencies are responsible for policing unfair, deceptive, and abusive business practices; promoting competition within industries through the independent oversight of mergers, acquisitions, and joint ventures; promulgating rules that promote competition, including the market entry of new competitors; and promoting market transparency through compelled disclosure of information. These agencies will likely take the lead in implementing the EO and driving the changes that the EO requires through their exercise of regulatory authority or through the procurement process.
Section 5 (Further Agency Responsibilities of the EO) calls upon the different federal agencies to take a number of specific actions in support of the administration’s stated policy objectives. Many of these action items focus on labor and employment, health care and medicine, transportation, agriculture, technology, and defense procurement.