Joe Biden To Sign Executive Order Calling For Greater Scrutiny Of Mergers, Restoration Of Net Neutrality And Restrictions On Non-Compete Agreements

President Joe Biden plans to sign an executive order on Friday that calls for greater scrutiny of mergers, a restoration of net neutrality rules and limits to corporate non-compete agreements.

As much as Biden will highlight the potential benefits to consumers and workers by some of the measures, a number of the proposed changes will require federal agency action or Congressional approval.

But Biden intends to highlight the consolidation in the marketplace to make the case that a lack of competition drives up prices.

The executive order singles out a series of industries, including tech, banking, agriculture, healthcare and transportation, while identifying what the White House sees as specific problems in the marketplace, like Internet providers’ pricing practices.

But the impact of the proposed changes, if implemented by agencies like the Federal Trade Commission, would be across other sections of the economy.

According to an outline of Biden’s executive order released by the White House, he plans to call on the FTC to ban or limit non-compete agreements, commonplace clauses in employee contracts in entertainment, media and other industries. The White House said that half of private sector employers require employees to enter non-compete agreements, and it affects 36 million to 60 million workers.

Another proposal is that the FCC restore net neutrality rules, which were rolled back during the Republican-dominated FCC of the Trump years. But the FCC is split 2-2, and any action is unlikely until Biden nominates a third Democrat to fill the slot.

A large portion of the executive order will focus on the tech sector, as it targets some of the business practices of the large platforms.

The administration wants the DOJ and FTC to give proposed mergers overall greater scrutiny, but to pay “particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by ‘free’ products, and the effect on user privacy.” Biden also plans to call for the FTC to establish rules barring methods of unfair competition on internet marketplaces. That clearly is aimed at Amazon, which has been the subject of scrutiny on Capitol Hill for the way that it has been selling its own products on its platform against those of rivals. The administration also wants the FTC to create rules on surveillance and the collection of data by tech giants.

Lawmakers already have sounded the alarm over such practices among the tech giants, including a series of bills that recently passed the House Judiciary Committee, and if they ever became law, they could force platforms to shed some of their assets. But the prospects for the bills are uncertain, even as the legislation has drawn bipartisan support.

More immediate may be action at the agency level, as Biden signals a desire to step up antitrust enforcemment.

Biden has in place a champion for rigorous antitrust enforcement on the FTC — Lina Khan, confirmed last month as a commissioner and quickly appointed as chair — but he has yet to nominate someone to lead the Justice Department’s Antitrust Division.

Biden’s EO will not only call on the agencies to enforce antitrust laws more vigorously, but remind them that the law allows them to challenge past mergers. The White House will establish a Competition Council to monitor the progress on the administration’s proposal.

 

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