Get Antitrust Legislation Done, Chuck Schumer
Antitrust legislation is now up to one man, Senate Majority Leader Chuck Schumer. He promised a vote on antitrust legislation in May. Will he deliver?
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Today I’m writing about the final opportunity for Congress to do something on antitrust and how it’s now up to one person, Chuck Schumer, the Democratic leader of the Senate.
First, some house-keeping having to do with the crypto fiasco. I was on Coindesk TV to talk about the crypto meltdown, which you can watch here. Also, if you want to know why the crypto collapse hasn’t affected the real economy, my organization put out a report on crypto regulation, titled ‘Gary Gensler Got It Right.’
In May of this year, Senate Majority Leader Chuck Schumer made an important promise, and one that surprised both me and a lot of the people who care about anti-monopoly policy. He said he’d hold a vote on some or all of the antitrust legislation that Congress had been working on over the last three years, in the early summer. This promise was supposed to be the capstone to an important initiative in both the House and Senate.
It was also a promise for something extremely valuable, namely Senate floor time. The Senate has a limited amount of time to take votes, and the job of the majority leader is to prioritize whether that time is used for legislation, nominees, judges, whatever. Schumer’s promise meant the Senate would likely spend a week of its floor time on antitrust legislation, and that was a big commitment. The reason for that commitment is that Congress had put a lot of work into antitrust, and Schumer, as the Senate Majority Leader, has to take into account what the priorities of his fellow Senators are.
Since 2019, different committees in Congress have been aggressively looking at two basic monopoly problems. The first is the market structure of big tech firms, notably Apple, Amazon, Google, and Facebook. This came from the House-side, with support from the Senate. The main effort was a 19-month investigation spearheaded by Democrat David Cicilline and Republican Ken Buck in the House Antitrust Subcommittee. Their staff pored through millions of documents, interviewed hundreds of competitors, put big tech CEOs on the hot seat, and published an important report on how big tech firms and markets work. They eventually wrote a series of bills to address some of the problems they found.
The second topic was the broader monopoly crisis across the economy. In the last two years in the Senate, Senator Amy Klobuchar, who chaired the relevant subcommittee, has held hearings on enforcement, big data, app stores, hospitals, ‘smart’ homes, food supply chains, online marketplaces, innovation and antitrust, newspapers, credit cards, baby formula, the antitrust laws themselves, as well as specific mergers like Kroger-Albertsons. This is a LOT of activity, and it doesn’t include the multiple hearings to actually write antitrust legislation. Contrast this level of activity with 2013-2016, when the Senate held basically one pro forma oversight hearing.
As a result of all of this work, these committees have produced legislation that has passed committees and the House of Representatives with support from both parties. There was some legislation - like that to directly break up the big tech platforms or block big tech mergers - that passed the House Judiciary Committee but don’t have consensus support. There are a few key bills, however, that are ready to be written into law. These include legislation to break up Apple and Google control of app stores (which is already happening in Europe), a proposed law to give newspapers more bargaining power, and a bill that would modestly increase filing fees for mergers and give more power to state attorneys general. There’s also a bill to block discrimination more broadly by big tech firms.
These bills have broad support and passed House and Senate committees. The White House supports them, and the last one actually passed the House with a bipartisan vote. Taken together, these bills would have a catalytic effect on competition and monopoly power. Since the Republicans are going to take over the House, and the GOP leadership has a demonstrated hostility to most antitrust legislation, passing these bills now is the last chance to actually get some of them done, at least for a few more years.
The last remaining hurdle is getting the bills to pass the Senate floor. So Schumer’s promise to hold a vote on antitrust bills back in May was a big deal. He was essentially saying to his caucus, and in particular to Klobuchar, ‘I hear you care about antitrust, I will help you get it done.’ The problem, however, is simple. Schumer just didn’t hold the vote or dedicate the floor time. He kept delaying, changing his rationale, and just not doing what he promised. For the last week or so, the Senate has been spending its floor time on nominations, which is what you’d hold votes on if you wanted to kill antitrust legislation. Schumer was, as it turns out, not telling the truth when he said he would hold a vote.
Why? One argument from Schumer skeptics is that the Senate Majority leader is sympathetic to monopoly power, and has been for years. They would point to the fact that one of his daughters works at Meta, and another is a lobbyist for Amazon. Earlier this year, while considering whether to hold a vote on antitrust legislation, Schumer went to Seattle to collect campaign money, and met with important executives at large tech firms. Going back a few years, his brother was involved in the Live Nation-Ticketmaster merger, which Schumer initially called a “good deal for New York.” And in the early 2000s, when the Senate was on the verge of closing the kickback loophole for Group Purchasing Organizations, the monopolies that cause medical shortages, it was Schumer who came to their defense.
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I don’t think we should overstate Schumer’s sympathy to monopolists. In 2018, he and Pelosi made stronger antitrust laws part of their “Better Deal” platform they pledged to enact if voters gave Democrats a Congressional majority. He appointed anti-monopolist Rohit Chopra to be a Federal Trade Commissioner, as well as his own staffer, Rebecca Kelly-Slaughter, who has generally voted well on mergers and antitrust cases. That’s not nothing. And I doubt he has strong ideological views on antitrust law itself. Schumer is a deal-maker type politician, weighing donors and stakeholders in his head. He also knows much of his caucus wants to move these bills, and is aware that he will look bad if it turns out he just straight-up lied to Klobuchar. But the point is, Schumer is cross-pressured on the issue. And if antitrust legislation died, I bet he’d probably be fine with it.
So is antitrust legislation dead? Not quite. At this point, it’s too late to have a vote. That doesn’t mean Congress can’t act, it just means that the final priorities are being hashed out in private by Chuck Schumer, Nancy Pelosi and Mitch McConnell. Over the past couple of weeks, there have been chances to put antitrust legislation into ‘must-pass’ bigger bills. For example, in the defense authorization bill, Schumer did try to put the bill to help newspapers, but McConnell said he wanted that bill to only include defense-related measures. The final vehicle for this Congress is the broader government funding bill, known as the 'omnibus.’ Schumer can choose to put some or all of these antitrust bills into the omnibus. And the Senate will vote them through, because even opponents of these bills realize it’s just not worth shutting down the government to block some modest changes to antitrust law.
So now it’s up to Chuck Schumer. Will he throw away years of Congressional work on addressing the problem of monopoly? Will he show himself as a dishonest leader willing to promise and then not deliver to his own members? Or will he actually move something through Congress?
That’s the question one should ask, if you want to know why Democrats will or won’t pass antitrust legislation.
What I’m Reading
Penguin Random House CEO Resigns Weeks After Simon & Schuster Deal Was Blocked, Wall Street Journal
SEC Proposes Rules That Would Squeeze Stock-Market Middlemen, Wall Street Journal
The Boeing plan requires a price discovery waiver, exempting the contractor from an in-depth review that ensures the Pentagon is getting the best deal possible.
SEC kicks enforcement into overdrive in 2022, Pensions and Investments Magazine
Reversing the Stricter Limit on Interest Deductions: Another Huge Tax Break for Private Equity, Institute on Taxation and Economic Policy
Where Does All the Cardboard Come From? I Had to Know., NY Times Magazine
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