Executive Order on Promoting Competition in the American Economy https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/
Remarks by President Biden At Signing of An Executive Order Promoting Competition in the American Economy https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/07/09/remarks-by-president-biden-at-signing-of-an-executive-order-promoting-competition-in-the-american-economy/
CEA: Heather Boushey and Helen Knudsen, The Importance of Competition for the American Economy https://www.whitehouse.gov/cea/blog/2021/07/09/the-importance-of-competition-for-the-american-economy/
FACT SHEET: https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/
For decades, corporate consolidation has been accelerating. In over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture and more.
That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled. Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service.
Barriers to competition are also driving down wages for workers. When there are only a few employers in town, workers have less opportunity to bargain for a higher wage and to demand dignity and respect in the workplace. In fact, research shows that industry consolidation is decreasing advertised wages by as much as 17%. Tens of millions of Americans—including those working in construction and retail—are required to sign non-compete agreements as a condition of getting a job, which makes it harder for them to switch to better-paying options.
In total, higher prices and lower wages caused by lack of competition are now estimated to cost the median American household $5,000 per year.
Inadequate competition holds back economic growth and innovation. The rate of new business formation has fallen by almost 50% since the 1970s as large businesses make it harder for Americans with good ideas to break into markets. There are fewer opportunities for existing small and independent businesses to access markets and earn a fair return. Economists find that as competition declines, productivity growth slows, business investment and innovation decline, and income, wealth, and racial inequality widen.
When past presidents faced similar threats from growing corporate power, they took bold action. In the early 1900s, Teddy Roosevelt’s Administration broke up the trusts controlling the economy—Standard Oil, J.P. Morgan’s railroads, and others—giving the little guy a fighting chance. In the late 1930s, FDR’s Administration supercharged antitrust enforcement, increasing more than eightfold the number of cases brought in just two years—enforcement actions that saved consumers billions in today’s dollars and helped unleash decades of sustained, inclusive economic growth.
Today President Biden is taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses. Today’s historic Executive Order established a whole-of-government effort to promote competition in the American economy. The Order includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition problems across our economy. Once implemented, these initiatives will result in concrete improvements to people’s lives.
Among other things, they will:
Make it easier to change jobs and help raise wages by banning or limiting non-compete agreements and unnecessary, cumbersome occupational licensing requirements that impede economic mobility.
Lower prescription drug prices by supporting state and tribal programs that will import safe and cheaper drugs from Canada.
Save Americans with hearing loss thousands of dollars by allowing hearing aids to be sold over the counter at drug stores.
Save Americans money on their internet bills by banning excessive early termination fees, requiring clear disclosure of plan costs to facilitate comparison shopping, and ending landlord exclusivity arrangements that stick tenants with only a single internet option.
Make it easier for people to get refunds from airlines and to comparison shop for flights by requiring clear upfront disclosure of add-on fees.
Make it easier and cheaper to repair items you own by limiting manufacturers from barring self-repairs or third-party repairs of their products.
Make it easier and cheaper to switch banks by requiring banks to allow customers to take their financial transaction data with them to a competitor.
Empower family farmers and increase their incomes by strengthening the Department of Agriculture’s tools to stop the abusive practices of some meat processors.
Increase opportunities for small businesses by directing all federal agencies to promote greater competition through their procurement and spending decisions.
The Order also encourages the leading antitrust agencies to focus enforcement efforts on problems in key markets and coordinates other agencies’ ongoing response to corporate consolidation. The Order:
Calls on the leading antitrust agencies, the Department of Justice (DOJ) and Federal Trade Commission (FTC), to enforce the antitrust laws vigorously and recognizes that the law allows them to challenge prior bad mergers that past Administrations did not previously challenge.
Announces a policy that enforcement should focus in particular on labor markets, agricultural markets, healthcare markets (which includes prescription drugs, hospital consolidation, and insurance), and the tech sector.
Establishes a White House Competition Council, led by the Director of the National Economic Council, to monitor progress on finalizing the initiatives in the Order and to coordinate the federal government’s response to the rising power of large corporations in the economy.
A more detailed summary of the key actions in the Order is provided below: . . . [Sectors covered]
Healthcare (prescription drugs, hearing aids, hospitals, health insurance)
Transportation (airlines, rail, shipping)
Banking and Consumer Finance
NYT: Biden Urges More Scrutiny of Big Businesses, Such as Tech Giants https://www.nytimes.com/2021/07/09/business/biden-big-business-executive-order.html
WSJ: Biden Targets Big Business in Sweeping Executive Order to Spur Competition https://www.wsj.com/articles/biden-takes-aim-at-corporate-consolidation-big-business-tactics-11625832017
WaPo: Biden’s bid to take on big business sets off battle over who holds power in U.S. economy https://www.washingtonpost.com/business/2021/07/09/biden-executive-order-promoting-competition/
NYer: John Cassidy, The Biden Antitrust Revolution https://www.newyorker.com/news/our-columnists/the-biden-antitrust-revolution
Historical antecedent -- FDR's Temporary National Economic Committee:
President F.D. Roosevelt, "Message to Congress on Curbing Monopolies," April 29, 1938 https://www.presidency.ucsb.edu/documents/message-congress-curbing-monopolies
U.S. Congress, "Joint Resolution to Create a Temporary National Economic Committee" (June 16, 1938), The American Economic Review, Vol. 32, No. 2, Part 2, Supplement, Papers Relating to the Temporary National Economic Committee (Jun., 1942), pp. 129-131 https://www.jstor.org/stable/1805351
Robert A. Brady, "Reports and Conclusions of the Temporary National Economic Committee," The Economic Journal, Vol. 53, No. 212 (Dec., 1943), pp. 409-415 https://www.jstor.org/stable/2226410