Biden Launches Sweeping Action on "Big Tech, Big Pharma, and Big Ag." Can It Be Real?

"In the late 1930s, FDR’s Administration supercharged antitrust enforcement, increasing more than eightfold the number of cases brought in just two years."


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On Friday, Biden ordered every part of the Federal government - not just the antitrust enforcers - to focus on creating fair competition, using whatever statutory authority they have at their disposal to take on big business in concentrated markets. The executive order he signed touches everything from railroads and shipping to pharmaceuticals and agriculture.

It seems like a big deal, and it likely is. So what does this order do? Is Biden really serious? And can he pull it off? That’s what I’m writing about today.


  • The FBI says big-rigging costs the Federal government $120 billion a year.

  • Another day, another hack, another private equity owned software firm.

  • FTC Chair Lina Khan takes on meatpackers on behalf of domestic cattle ranchers.

  • Chinese Fashion House Shein builds a $10 billion business on tariff loopholes.

And now…

Biden: “Capitalism without Competition is Exploitation”

In 1938, Franklin Delano Roosevelt gave a speech to Congress on curbing monopolies. With the looming threat of of Nazi Germany’s growing power, Roosevelt warned Americans of the relationship between concentration and authoritarianism. “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself,” he said. Roosevelt called for the entire government to take on the problem of monopoly, encouraging stronger action on everything from antitrust to bank regulation to the misuse of patents.

And it worked - over the next few years, the Department of Justice brought more antitrust cases than had been brought from 1890 to that point. Congress passed laws regulating investment trusts, regulators cracked down on large banking houses, the Army and Navy kept contractors competitive and prevented price gouging in the build-up to war, and policymakers ended the misuse of patents that let monopolists dictate the roll-out of technology. With the Alcoa decision in 1945, the courts finally outlawed monopolies, and by the 1950s, powerful business leaders treated rivals, suppliers and workers reasonably, for fear of antitrust enforcement, setting the stage for the rise of Silicon Valley and the electronic century.

On Friday, Joe Biden reached back to that moment, and gave the most significant speech on monopolies by an American President since then. “Capitalism without competition isn’t capitalism,” he said. “It’s exploitation.” The speech very much paralleled how FDR framed his talk, emphasizing the importance of small business, workers, and consumers. Biden talked of the need to take on Big Tech, Big Pharma, and Big Ag, and even cited FDR’s call for an economic bill of rights, quoting Roosevelt’s goal of ensuring the “right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.”

But far more important was Biden’s explicit criticism of the Chicago School, by name. “Forty years ago we chose the wrong path,” said Biden. “Following the misguided philosophy of people like Robert Bork, we pulled back on enforcing laws to promote competition. We are now forty years into the experiment of letting giant corporations accumulate more and more power.” The President of the United States does not typically wade into esoteric legal debates involving competition lawyers. But the policy he was introducing in this speech required it. Biden was giving a speech about an executive order mandating that the policy of the Federal government is to promote fair competition, not just through the antitrust laws, but through every agency with authority to structure markets.

Biden’s speech is as important an ideological turnaround as we see in politics, as big a deal as Ronald Reagan’s statement that “Government is not the solution to our problem, government is the problem.” Biden explicitly called out lax controls on corporate power as the causal factor behind American stagnation. “What have we gotten from it?” Biden asked. “Less growth, weakened investment, fewer small businesses. Too many Americans who felt left behind, too many people who are poorer than our parents. I believe the experiment failed.”

Right after his speech, Biden signed the executive order, and handed the pen he used to new FTC Chair Lina Khan, who was standing behind him. The message, in other words, was clear. This order is a mandate for agencies across government to follow Khan’s lead on competition. And if it weren’t clear enough, White House chief of staff Ron Klain approvingly tweeted out headlines about the order: “Biden targets corporate power,” (WaPost), “Biden order targets big business,” (WSJ) and “Biden aims at cutting dominance of big business” (FT).

And as if to add symmetry to the moment, a few minutes after the event wrapped, news broke that Khan’s FTC just opened a lengthy probe into Amazon’s acquisition of MGM studios, moving antitrust staff from other parts of the commission to the investigation of one of the largest and most powerful firms in the world.

Well then.

What Does the Order Actually Do?

The executive order does a lot, but to put it simply, if there were a way to write an executive order just for readers of this newsletter, that’s what this order would be.

The order has three basic parts. The first is a policy statement, an assertion that the U.S. government is dedicated to fighting against corporate concentration. The second is that the White House is going to ride herd on government policymakers, setting up formal council with the heads of most cabinet agencies and regulators to meet about competition. And the third is a list of 72 specific items, as well as reports, that agencies are ordered or encouraged to enact according to their existing legal authority.

Many of these items will be familiar to readers of this newsletter. The first item Biden mentioned in his speech, for instance, is having the Food and Drug Administration make it possible to buy over the counter hearing aids, a monopoly I noted back in May. Hearing aids cost thousands of dollars apiece, for no other reason than there is a cartel established by government that prevents firms from selling hearing aids without a prescription. In 2017, Congress passed an Elizabeth Warren bill mandating that the FDA fix this situation. But the bureaucrats at the FDA just… refused. Now Biden is explicitly ordering them to act. This action item could help up to 40 million people affected by hearing loss.

Biden next mentioned non-compete agreements, which I wrote about last January. The order directs the Federal Trade Commission to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” Between 30-60 million Americans have signed contracts with their employers that prevent them from working for a rival. There are reasonable grounds for preventing the theft of trade secrets or customer relationships, but these non-competes are mostly designed to suppress wages and prevent potential rival employers from hiring. While labor questions are often partisan, this one isn’t - Senator Marco Rubio has attacked non-compete agreements for low-wage workers.

Biden also included a provision ordering the Agriculture Department to address consolidation in the meatpacking supply chain. When I interviewed cattle ranch advocate Bill Bullard, this is something he mentioned. There are provisions to addressing consolidation and overcharges in railroads and ocean shipping, which I noted when that big dumb ship got stuck in the Suez Canal. There are provisions on consumer protection for airlines, which I touched on last June.

The list is too long, so I’ll just mention a few more items. The order includes an app store study by the Department of Commerce, directions to craft rules on data and surveillance, a mandate to import pharmaceuticals from Canada, hospital price transparency, a crackdown on cheating in the medical industry, restrictions on defense contractors, studies on the concentration in food systems and its impact on small grocery stores, a look into consolidation in brewing and liquor, as well as rollups in seeds and chemicals. I mean, the order resurrects the Robinson-Patman Act against price discrimination, which enforcers gave up on in the 1970s and I tagged in 2019 as a core reason for Walmart’s dominance. It feels a bit like I wrote this order.

Biden set up the Federal Trade Commission as the flagship for competition policy across the government. Many of the items listed in the order require the Federal Trade Commission’s authority, and others require agencies to consult with the FTC when they are doing studies or issuing rules. This order, in many ways, is the fulfillment of the original point of the commission, which was created in 1914. The FTC is often seen as an enforcer of consumer protection and antitrust laws, but its mandate actually goes far beyond that. Crafters of the FTC, which included Louis Brandeis, sought to build a research and regulatory body to help Congress and the government organize fair competition throughout the economy, both facilitating useful standards in business and serving as an aid to agencies, states and the courts so they can understand complex commercial and competition questions.

This order returns the FTC to Brandeis’s original vision, as the flagship in the government’s attempt to promote liberty in the marketplace.

The Reaction: Pushback and Praise

I spent Friday calling around and tracking the reaction to this order. And what’s interesting is that the response, positive or negative, was not partisan. A lot of Democrats praised the order, which one would expect, as Biden is a Democrat. Elizabeth Warren, who in many ways brought the monopoly power problem into politics in 2016, was jubilant. Progressives Ro Khanna, Mondaire Jones, and Chuy Garcia came out in strong support, as did Senator Amy Klobuchar, the chair of the antitrust subcommittee in the Senate.

What’s far more interesting is the amount of praise from traditionally rightwing rural groups. The American Farm Bureau, which is quite Republican-leaning, tentatively praised Biden for the right-to-repair mandate letting farmers fix their own equipment, as well as his attempt to do something about consolidation in the food supply chain. The U.S. Cattlemen’s Association, yet another right-leaning group, came out in support, attacking the big four meatpackers and calling Biden’s order an “important step.”

The Montana Farmers Union was supportive, as was the National Corn Growers Association and Family Farm Action, and the National Grange, a traditional agricultural lobby group that has existed since the 19th century.

The reactions from big business were not so kind. The U.S. Chamber of Commerce was harsh, calling the order a “government knows best” approach. The Association of American Railroads, which is the trade association for the monopolistic rail industry, alleges the order threatens the very viability of our transportation system. Warren Buffett owns a large chunk of the American rail system, but his empire, as Dave Dayen noted, spans a number of monopolies across our economy. I suspect this order, if it is fully implemented, will hit Berkshire Hathaway fairly hard over time.

Libertarian mouthpieces were also upset by the order. Tyler Cowan, author of Big business: A Love Letter to an American Anti-Hero, wrote in resigned frustration that the order benefits farmers. Meanwhile, Trump’s former FTC general counsel Aldon Abbott, a die-hard Chicago Schooler, echoed the Chamber of Commerce, and simply denied that corporate concentration is worth addressing. “The order commits the fundamental mistake of proposing intrusive regulatory solutions,” Abbott wrote, “for a largely nonexistent problem.”

The most interesting pushback was by Google, Facebook, and Amazon, as well as Chinese giants DJI and Alibaba. All of these firms speak though the trade association Netchoice, which has them as key members. Netchoice didn’t bother to try and convince Democrats. Instead, the big tech trade association used the order to lobby Republicans, making the case that Biden’s actions against monopoly are opening the door to a larger more powerful government. Here’s the key part of Netchoice’s statement:

“Sen. Lee and Rep. Jordan’s warnings were right – when Republicans back progressive antitrust proposals because of concerns about tech, they open the door to progressive antitrust activism… By backing hard-left proposals, like nominating Lina Khan to the FTC and Rep. Cicilline’s antitrust legislation, anti-tech Republicans bear responsibility for the damage that will result from importing a European-style antitrust framework to all sections of the American economy.”

Netchoice represents mostly American giants, but also Chinese dominant players. So it’s interesting is to see the Chinese tech giants through their lobbying proxy coming out against Biden’s anti-monopoly actions, and praising conservative Republicans Jim Jordan and Mike Lee in the process. It’s clear that both big tech, and China’s own tech giants, do not want to see anti-monopolists like Lina Khan succeed. But conservative Trump-supportive ranchers, by contrast, do.

The politics, in other words, are all scrambled.

Biden versus the Deep State: Can He Pull It Off?

Now, the biggest question with this executive order is not whether it’s a good idea, but whether Joe Biden can actually follow through on it. And there are multiple layers to this question. The first is something that makes liberals uncomfortable, which is that the stereotype of government bureaucrats is often true. Government staffers are deeply hostile to change. The deep state, in other words, is real.

Take the Food and Drug Administration, which handles large swaths of our medical regulatory system, and structures pricing across a host of markets. Congress passed a law telling the FDA to write new rules on hearing aids by 2020. The bureaucrats over there just refused to follow that law. Why would an agency like the FDA choose to flout Congress? I don’t know, but I suspect it’s because staffers at the FDA just don’t think competition is their job, and they want medical firms to make a lot of money because they believe that those firms will then be able to invest in more research.

The FDA’s refusal to follow the law isn’t an anomaly. For decades, the FTC has chosen not to enforce the Robinson-Patman Act against price discrimination, just as the Department of Transportation generally acts as an agent of dominant airlines, and the Defense Department contractor officers want to keep contractors happy. I suspect Transportation or Pentagon bureaucrats are similar; why pressure American Airlines or anyone else on competition, when you need them to make sure the air travel system is functional? Why pressure Lockheed on price or technical data when you need their weapons system delivered urgently to some commander?

Fundamentally, staff across government are going to look askance at random priority from above on competition, written by political people who probably won’t be there for long. So that’s a challenge, prioritization and management of a big lethargic organization called the Federal government.

Another problem is related - Joe Biden and the Senate have simply not staffed up the administration to actually govern. There is no nominee for a host of positions across government, from the head of antitrust at the Justice Department to the chief at the Office of Management and Budget, various bank regulators, the Federal Communications Commission, Solicitor General, the Office of Information and Regulatory Affairs, etc. as well as a host of ambassadorships and important positions at the Pentagon and the Department of Commerce. While Lina Khan has a temporary full commission, Commissioner Rohit Chopra has been nominated to run a consumer protection agency. So there will need to be a fifth nominee, or she will be hamstrung.

Not having a lot of political appointees in place isn’t the worst situation in the world, as acting leaders can act. The acting head of antitrust at the Justice Department, Richard Powers, for instance, immediately set up a task force to help agencies across government implement the order. But it’s not ideal, because acting leaders prefer not to make big policy decisions. I don’t know why the staffing is taking so long. There are possible ethics process issues, FBI background checks, and Senate calendar problems. But if you want to govern, you need to staff a government. Biden hasn’t fully done that, and Democrats in the Senate, led by Chuck Schumer, aren’t really helping.

Still, there are good reasons to think that something useful will come of this order.

The Politics

In 2016, on the eve of Trump’s election, I published an article titled “How the Democrats Killed their Populist Souls.” In it, I traced the life of rural Texan Democrat Wright Patman, and how he welded together a coalition of independent businessmen, farmers, and laborers into a populist coalition to take on Eastern monopoly capital. The collapse of Patman’s politics in the 1970s, and then the acceleration of this collapse into the Obama years, created Trump’s politics.

This order, in some ways, represents an attempt to break from this pattern. The same day as the order, the U.S. Department of Agriculture announced a $500 million program to build new meatpacking capacity in areas where there is only one packer. That’s potentially a big deal, to directly finance competitors against the big four meatpackers. Already, political reporters are wondering whether this order will impact the midterm elections when Congress is up for grabs.

It’s hard to know whether this order will impact elections. For decades, the politics of the marketplace has been defined as something for economists and experts, so politics to many people has a cultural meaning and nothing more. In many ways, Democrats don’t even know how to have this debate; they have lost key relationships across rural America, with little awareness of the bankers, pharmacists, grocers, farmers, and businesspeople who structure the politics of rural America. Moreover, even if that weren’t the case, the distrust of our policymakers is so deep and profound that citizens don’t necessarily see any relationship between their lives and politics. Then of course there’s the media, which is a key filter for how people learn, and the media has its own weird psycho-dramas and tends to ignore political economy.

All that said, Joe Biden is trying to restructure Democratic politics in a fundamental way. Biden seems like an unlikely realignment type on the Democratic side of the aisle. He’s a 78-year old who was Obama’s VP, and came to power in what he calls the ‘corporate state of Delaware.’ He picked Silicon Valley-friendly Kamala Harris as his VP, and is as distant from self-described radicals as anyone in Democratic politics. That said, before the election, I did a lot of interviews and wrote a piece on what Biden would be like as President. The overwhelming sense among Democratic policymakers was that he would be different, and far more populist than Obama was. Biden, like many in the policy world, realized that something had gone very wrong with America.

That prediction turned out to be true. On Friday, Biden said that it is his administration policy to break from forty years of pro-corporate policymaking. I don’t know if he can do it, and if it will translate into a new kind of politics. But standing behind him, smiling, was Lina Khan.

(If you have suggestions for what the government should be doing - beyond antitrust actions and under existing regulatory or spending authority - send me an email or put it in the comments.)

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FBI: Contractors Steal $120 Billion+ from the Federal Government: Government contracting in the U.S. is pretty corrupt. I’ve noted that the government pay scale for, say, McKinsey, is $3 million a year for one college graduate to work on a project. But it goes way beyond that. In 2019, the FBI put together a task force to look into bid-rigging in procurement, which is when bidders collude to rig an auction for government contracts.

The FBI noted that, “by some estimates, roughly 20% of government procurement spending is lost each year to bid rigging—a significant sum when the budget for discretionary spending on public procurement is more than $580 billion, as it was in 2019.”

The amount spent this year is $639 billion on procurement, and there’s no reason to assume the amount of bid-rigging has gone down. One fifth of that is stolen.

Another Day, Another Hack Via a Private Equity Owned Software Firm: First it was PE-owned Solar Winds that let hackers break in to large companies and the Federal government, including our nuclear weapons facilities. Then it was PE-owned Pulse Connect Secure that let hackers take over New York subway systems. What they don’t cut in terms of security spending they offshore, purely to generate cash.

And here we go again.

A successful ransomware attack on a single company has spread to at least 200 organizations, according to cybersecurity firm Huntress Labs, making it one of the single largest criminal ransomware sprees in history.

The attack, first revealed Friday afternoon, is believed to be affiliated with the prolific ransomware gang REvil and perpetuated through Kaseya, an international company that remotely controls programs for companies that, in turn, manage internet services for businesses.

Kaseya is owned by a private equity firm Insight Partners, and Glassdoor reviews are full of the standard ‘they don’t invest in R&D and customer relationships’ type of boiler room anger that is common with firms like this. Kaseya also has over 100 employees in Belarus, largely doing software development and testing. Offshoring security to a nation so closely intertwined with the Russian economy is… not wise.

The World Turned Upside Down: Lina Khan's FTC Fights for Domestic Cattle Ranchers: A week and a half ago, the FTC, under new Chair Lina Khan, held its first open meeting in decades, and pushed through a bunch of important regulatory changes. One was a change to labeling requirements for meat labeled as Made in U.S.A. 

Cattle ranchers are upset that they are getting paid very little for their product, even as beef prices for consumers are incredibly high. What the big four meatpackers are doing, ranching advocates are saying, is importing 3 billion pounds of beef from abroad - Argentina or Uruguay or Mexico - and then selling it domestically, often labeled as Product of USA. They can do this because the government set standards allowing packers to label imported cattle as a Product of the USA, as long as cattle is processed in America. This allows meatpackers to drive down the price paid to domestic ranchers, because they can deceptively market product from Brazil as American beef.

At this first open meeting, the Federal Trade Commission took steps to put a stop to this sleazy and harmful activity. The Made in USA rule specifically notes that meat must be born and processed domestically to be labeled as such. Cattle ranchers were quite happy. A lot of eyebrows went up when Lina Khan got 22 Republican Senate votes confirming her to the FTC. But there’s a reason she got those votes.

Chinese Fashion House Shein builds a $10 billion business on tariff loopholes

Dresses for $10? Shorts for $6? Tank tops for $4? Yes, that’s what Chinese clothing retailer Shein is now offering.

With sales at $10 billion and growing, Shein is restructuring the clothing industry. Why? It’s not because the clothes are cool, it’s because of a tax loophole that Barack Obama and then Donald Trump put into trade law for online purchases.

Because Shein ships most orders from its warehouses in China, it was already in a good position in the U.S., where packages worth less than $800 have been able to enter the country duty-free since 2016. When the Trump administration later imposed tariffs to make Chinese products more expensive, the small-value shipments remained exempt.

That’s the de minimus exception for imports, which allows individuals to buy up to $800 of goods every day duty and tax free. That wouldn’t be such a big deal because most retailers buy large quantities and then put them in stores for sale, so duties and tariffs apply. Now, however, online merchants, like Amazon and Shein, ship directly to consumers, and they argue that the consumer is the end purchaser.

That means everything under $800 bought online and shipped directly from a Chinese warehouse comes in duty free. The Customs and Border Patrol can close parts of this loophole, but ultimately Congress should get rid of it. There’s just no reason to have one set of import rules for stuff that’s bought online and a different set for everything else.

Or to put it another way, there’s a reason we don’t make much clothing in America anymore. That reason is called policy.

Thanks for reading. Send me tips on weird monopolies, stories I’ve missed, or comments by clicking on the title of this newsletter. And if you liked this issue of BIG, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.


Matt Stoller