By Natalie DeCoste

On Thursday, July 22, the Committee for Justice hosted an online entitled “Biden’s Executive Order on Competition: A Discussion” moderated by Ashley Baker, the Director of Public Policy for the Committee for Justice. The event centered around President Joe Biden’s July 9 “Executive Order on Promoting Competition in the American Economy.”

The executive order (EO) is one of the most sweeping executive orders in several decades, with the ability to drastically expand the federal government’s power. The EO contains 72 specific actions that will impact a wide variety of industries and companies, including Big Tech companies, financial institutions, internet service providers, pharmaceutical companies, railways, airlines, biopharmaceutical innovators, drug prices, patent owners, and more.

Speakers on the panel included Jay Ezrielev, the Founder of Eleven, an economic consulting firm, and the former Economic Advisor to Federal Trade Commission (FTC) Chairman Joseph Simons; Steven J. Cernak, a partner at Bona Law PC; and Bilal Sayyed, Senior Adjunct Fellow at TechFreedom and the former Director of the FTC Office of Policy Planning.

The panel began with Steven Cernak discussing the sweeping nature of the EO and the different agencies within the federal government that it impacts. Illustrating for the listener the scope of the EO, Cernak listed the Federal Reserve, the FTC, the SEC, the FDIC, the FCC, the FMC, the CFTC, the CFPB, the DOT, HHS, and an additional new White House competition council.

“This is not just about the Internet, or platform businesses, or Big Tech companies, but it really involves, you know, not just the whole of government but the whole of the economy of pharma, hospitals, container shipping, farmers, small farmers, seeds, banks, newspapers, and seemingly extraneous mention of the public health insurance option that doesn’t quite fit in but it sits in there anyway,” explained Cernak.

Cernak addressed how there is a world in which executive orders for antitrust are not all bad and serve to tell the government to “get out of the way.” Executive orders could reduce barriers for entry and rescind unnecessary regulations, but this is not one of those orders. Rather, this executive order assumes there is a reduction of competition and an increase in concentration of power across the whole of the economy that the government must fix.

Cernak’s also included the issue of consumer protection in his explanation of the goals of the EO.

“It’s clear that, whether talking about the antitrust laws, or any of the other laws mentioned, they were not looking just to protect consumers. We are looking to protect consumers, but it goes beyond that,” said Cernak addressing the difficulties of using the E.O. to protect so many different groups. “Sometimes, the EO talks about workers, businesses, and consumers. Other times it talks about workers, farmers, small businesses, startups, and consumers.”

The panel next shifted to Jay Ezrielev, highlighted the fact that there are some positives to the EO that may further competition.

“There’s some constructive proposals in the Executive Order. A number of proposals aimed to improve price transparency and transparency of contract terms, increasing transparency would be a positive for competition. There is also called for eliminating restrictions on occupational license mobility; eliminating such restrictions improved labor mobility and may enhance labor market… there’re some proposals to limit regulatory burdens on firms in certain markets. Such proposals may enhance competition. For example, proposals for over-the-counter hearing aid sales likely to increase competition and reduce price,” explained Ezrielev.

After acknowledging that some benefits may come from the EO, Ezrielev explained that the order lists several problems that it claims need to be addressed, including excessive market concentration, higher prices for specific items, and labor monopsony driving down worker wages, among others. However, Ezrielev pointed out that these are either not problems, or at least not ones that need to be addressed through antitrust law.

“The Executive Order talks about increasing industry consolidation, but what’s relevant for competition is competition at the market level; for example, mergers between hospital systems in different parts of the country may increase industry consolidation, but such mergers do not harm competition or increase market concentration because hospital competition is local,” explained Ezrielev.

Ezrielev continued to dispute the EO’s assumptions about competition and concentration of power, explaining how the problem of consumers paying too much for broadband and cable television is assumed in the EO with no explanation as to how that process occurred or how government intervention would help. Additionally, Ezrielev explained that not all instances of concentration of power are bad for consumers.

“Some markets may be more efficiently served with a smaller number first because of scale economies. Market consolidation may actually make consumers better off. It is not at all clear to me that excessive concentration is a problem that needs to be solved with government intervention,” said Ezrielev.

Finally, Bilal Sayyed addressed some of the positive aspects of the EO, such as directing many agencies to look at their own conduct and rules. However, Sayyed agreed with remarks from both of his fellow panelists that the EO has unsupported or weakly supported assumptions and claims.

The discussion next moved to the question-and-answer section directed by Baker. Her first question was about what rising margins and rising consumer prices say about the state of U.S. competition and antitrust enforcement.

“Margins have indeed been increasing, but increasing margins is not at all indicative of weak competition or lax antitrust enforcement,” explained Ezrielev, saying that technological change, changing labor supply, and education shifts are more plausible reasons for rising margins.

Baker next focused on the recent open meetings being held by the FTC and asked if the agency is moving in the direction of increased rulemaking.

“Some of what the agency has done in the last month or roughly last month has been to remove you know some guidance documents… to the extent the agency will do rulemaking either on the competition side or on the consumer protection side, there are processes they have to go through,” said Sayyed, explaining how he takes comfort that the rulemaking process is just that, a process.

The event wrapped up with a discussion of the intersection of intellectual property and antitrust laws. Finally, it concluded with addressing concerns over the legal issues the FTC would face when engaging in rulemaking. As Sayyed explained, the agency heavily weighs the likelihood that appellate courts would agree with the agency.