Thunder on the Right
The anti-monopoly wave is going to look different on the right, but we're not going back to the old ways.
Welcome to BIG, a newsletter on the politics of monopoly power. If you’d like to sign up to receive issues over email, you can do so here.
What happens after the Biden administration? Right now, there are some new tough regulators going at consolidated corporate power. The FTC is trying to both break up Facebook’s social media empire and block its monopolization of virtual reality, the Antitrust Division is trying to reestablish criminal antitrust law, and bank regulators are ending the era of meaningless fines.
But the bureaucracies and the antitrust bar’s response is essentially, we can wait you out. The old guard will return. The Reagan-era founders of modern antitrust, men like Tim Muris and Howard Beales, are holding roundtables on the FTC “as we envisioned it” and as it had operated for the “last forty years,” criticizing Lina Khan as an activist and ideological actor. FTC Commissioner Christine Wilson, whose mentor is Muris, carries this fury into her current job. Here she is, attacking me for pointing out that she voted to support Facebook’s current monopolistic business model.
Matt Stoller @matthewstollerSure, because you would have voted against doing so. It was only when the Senate confirmed a fifth member that there was a majority to override you and @FTCPhillips and your pro-monopoly votes. This isn't partisan, you voted against Trump's Facebook antitrust case. https://t.co/dXewzKfFum
The problem for people like Wilson, and her guardians in the House and Senate, is that she is defending a status quo that Republican voters absolutely despise. It is the consumer welfare model that has led to the rise of big tech and dominant firms like Blackrock, centers of power that conservatives fear. Old guard libertarians like Senator Pat Toomey are retiring, and populist types are replacing them.
And this new crop is far more skeptical of corporate power, largely in response to their voters. For instance, Senator Tom Cotton is threatening to use antitrust to address the dominance of large institutional investors, a power center he imagines is reducing carbon emissions.
Cotton doesn’t have a clear economic vision, but is responding to voters and to a basic view that the oil and gas sector is a bulwark of American power. But his desire to purpose antitrust isn’t going to sit well with Tim Muris or Christine Wilson. He wants them to *do* something, and that’s not how the consumer welfare model works.
There are other deeper legal changes afoot. Conservatives are beginning to recognize that private litigation to constrain corporate power is important for their social vision. Legal scholar Brian Fitzpatrick has urged conservatives to use class action techniques, as the alternative is government regulation. “I feel like corporate America has a weaker place in conservative politics, in the Republican Party, than I’ve ever seen in my lifetime,” Fitzpatrick told the New York Times. “They could be in real trouble.” We can see this with Senator Mike Lee’s legislation to break up Google and Facebook, which eliminates arbitration clauses constraining lawsuits.
And in one important case coming before the Supreme Court - Mallory v. Norfolk Southern Railway - conservative plaintiff lawyer Ashley Keller is challenging the ability of corporations to escape being sued in local courts. Right now, you are very limited in precisely where you can sue a corporation, which means that corporations can largely keep lawsuits contained to friendly courts. This case could change that, and let people bring suits against large powerful firms all over the country. It’s an ideological challenge; the legal mastermind behind this suit, Keller, is a strong anti-monopolist who is also representing the Texas Attorney General antitrust case against Google.
Here’s the backstory. In 2018, a man named Robert Mallory sued the Norfolk Southern Railway, saying he was exposed to carcinogens while working for the company in Ohio and Virginia, which caused him to get cancer. He brought the suit in Philadelphia, since Pennsylvania requires corporations to allow themselves to be sued if they want to do business in the state. Norfolk alleged that it had a due process Constitutional right to only be sued where it is incorporated or in the firm’s principal place of business. And the Pennsylvania Supreme Court agreed, vacating the state’s jurisdiction-by-registration law, because that law compelled the corporation to give up its due process right to be sued in its hometown if it wants to do business there.
But it looks like the U.S. Supreme Court is going to overturn the Pennsylvania court, and then corporations can be sued all over the country. Effectively, the court will strip the ‘due process right’ that corporations have to avoid lawsuits in any but friendly courts.
Both parties are a jumble of different interests, some pro-consolidation and some against it. But the voters - especially on the right - are fed up. And that means big business is primed to lose significant amounts of power regardless of electoral outcomes.