Legislation & Regulation

Politics in Antitrust: This Time It's Different

Once found only in secret tapes, political intentions are now shared in tweets.

Both Democrats and Republicans see antitrust law as a critical issue that deserves much attention. They both wish to rein in the giants of technology, ecommerce, social media, and internet search through significant legislative change and increased enforcement. But the impetus for proposed changes and enforcement actions, as expressed by the politicians themselves, is very different from one party to the next, and very different from what we have seen in the past.    

Sen. Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced legislation to “reinvigorate America’s antitrust laws and restore competition to American markets.” Her Competition and Antitrust Law Enforcement Reform Act would “give federal enforcers the resources they need to do their jobs, strengthen prohibitions on anticompetitive conduct and mergers, and make additional reforms to improve enforcement.” Antitrust reform was a major theme of Klobuchar’s presidential campaign (and now her new book), as it was for her competitors for the Democratic nomination, especially Sen. Elizabeth Warren (D-MA). 

More recently, certain far right Republican senators have couched their calls for change as, depending on which side of the political divide you fall, much-needed responses to anti-competitive behavior or as retaliation for actions that run counter to their political points of view.  

Sen. Josh Hawley (R-MO)’s Bust Up Big Tech Act seeks to ban companies that market search engines, marketplaces, and exchanges from advertising or selling their own goods and services on their websites in ways that compete with the merchants who use the platforms. He wouldn’t be the first – regardless of political affiliation – to raise these concerns. Others feel these tech juggernauts have too much power and aren’t shy about using it. In making his announcement, though, Hawley said, “Woke Big Tech companies like Google and Amazon have been coddled by Washington politicians for years. This treatment has allowed them to amass colossal amounts of power that they use to censor political opinions that they don't agree with and shut out competitors who offer consumers an alternative to the status quo.” “Woke” is one of those words that takes on different meanings depending on who’s saying it. Hawley, of course, was paying a compliment to no one.

The Missouri senator and Sen. Ted Cruz (R-TX) and Sen. Mike Lee (R-UT) are drafting legislation that would end Major League Baseball’s exemption from U.S. antitrust laws, something the league has enjoyed for nearly a century. This announcement followed MLB’s decision to pull the All-Star Game out of Georgia because of the state’s new voting laws which, again, depending on where you stand, were designed either to achieve “fraud-free” elections or make it more difficult for minorities and Democrats to vote.  

The far right doesn’t have monopoly on seeing antitrust law as a potential weapon. As a presidential candidate, Sen. Bernie Sanders (I-VT), who criticized corporate-owned media and accused some news outlets of a bias against his campaign, vowed to clamp down on media mergers and toughen enforcement of antitrust laws against tech giants like Facebook and Google. “Today, after decades of consolidation and deregulation, just a small handful of companies control almost everything you watch, read, and download,” Sanders said in a Columbia Journalism Review editorial. “Given that reality, we should not want even more of the free press to be put under the control of a handful of corporations and ‘benevolent’ billionaires who can use their media empires to punish their critics and shield themselves from scrutiny.”  

With regard to who has control over political speech, Hawley and Sanders seem to have taken opposite routes to the same destination. Despite the differences between Democratic and Republican proposals and their stated motivations, the parties appear to be willing to stack hands on the need for more enforcement and scrutiny of mergers in already consolidated markets in which titans dominate.  

Is this anything new, really? Has antitrust law been used as a political football in the past?  

We do not need to look that far back to see how antitrust laws can and have been exploited by politicians for partisan or even personal purposes, rather than for consumers and healthy competition. The New York Times wrote about “bombshell testimony” in a June 25, 2020, story covering whistleblower revelations against then-President Trump and then-Attorney General Bill Barr. “John Elias, a senior career official in the antitrust division,” the Times wrote, “said Barr had improperly sought investigations into the marijuana industry and California’s dealings with automakers. ‘Personal dislike of the industry is not a valid basis upon which to ground an antitrust investigation,’ Elias said, referring to the cannabis cases.” Most market observers would agree.  

Jonathan B. Baker, a former chief economist at the Federal Trade Commission and the Federal Communications Commission, in a piece for a Chicago Booth School of Business publication, Promarket, said the concerns raised by Elias’ testimony “reinforce the importance of insulating antitrust from politics, which holds no matter who is in power.” 

“Antitrust is a powerful machine— both for maintaining competition and for advancing the interests of politicians who wrest control of its operation,” Baker wrote, noting two other presidents preceded President Trump in inserting himself into market dynamics. President Lyndon Johnson “held up the antitrust review of a bank acquisition until a newspaper publisher, who also ran one of the merging banks, agreed to reverse the paper’s editorial position against him.” President Nixon wielded his antitrust powers three times, according to Baker. Nixon ordered the Justice Department give up its challenge an International Telephone & Telegraph (ITT) deal, allegedly because the company contributed to the Republican National Convention; threatened three major television networks with antitrust litigation because of their negative coverage of his presidency; and allegedly accepted a campaign contribution from Howard Hughes in exchange for not challenging his acquisition of a Las Vegas hotel. 

Similar sentiments were expressed in the February 1993 issue of the American Journal of Political Science. In The Politics of U.S. Antitrust Regulation, B. Dan Wood and James E. Anderson of Texas A&M concluded, based on its resources and enforcement activity from 1970 to 1989, that the Antitrust Division’s “behavior is strongly affected by the major U.S. political actors, including the president, Congress, and courts.” 

Albert A. Foer is one of the leading minds in the global antitrust community. He founded the American Antitrust Institute in 1998 after spending time at a leading global law firm and in leadership positions at the Federal Trade Commission.  

In his now 20-year-old article -- The Politics of Antitrust in The United States: Public Choice and Public Choices, 62 U. Pitt. L. Rev. 475 – Foer discussed how politics influences the relatively apolitical world of antitrust enforcement. He discussed enforcement actions under presidents Reagan, Clinton, and Bush I, and some of the major antitrust actions in history. Despite the far-reaching effects of the antitrust law, Foer said Americans have shown it little interest in the subject. 

Back in 2001 when he wrote The Politics of Antitrust, antitrust wasn’t hyper-politicized, but there was no denying politics had some influence. "The approach of an election may well affect the timing of certain events by an administration,” Foer observed. “Incentive may exist to press harder to finish up certain important projects or to put off onto the next management team a few projects that might be selected for avoidance. Soon after President Reagan took office, for example, the IBM case was dropped, yet the AT&T breakup was completed."  

But, Foer said, “The history of antitrust enforcement in the U.S. is remarkably free from political or other scandal,” and that “[t]he vast majority of antitrust decisions are made without any direct input from legislative or executive overseers.” Largely, he said, enforcers try to steer clear of political influence for fear of oversight hearings and public humiliation, among other things.  

Historically, when antitrust was discussed by politicians it was behind closed doors and not in press statements. One of President Nixon’s many colorful comments involved antitrust investigations. Revealed in the tapes secured during Watergate, Nixon was recorded as saying he didn’t want incoming Attorney General Richard Kleindienst “raising hell about conglomerates,” pointing out in the most Nixonian of ways, that he would just as soon get rid of Kleindienst. “I don’t like the son of a bitch,” Nixon said, probably not for the first time. 

“There are and always will be examples of cases that are criticized for their doctrine or for their handling, but political interference and corruption almost never appear in the federal antitrust arena,” Foer wrote. He noted Microsoft’s effort to get Congress to cut the Antitrust Division’s budget in retaliation for the government’s case against the tech giant. “This effort quickly came to light, was blasted by everyone, further blackened Bill Gates' eye, and went nowhere politically,” Foer said.   

But Foer was writing in 2001. In 2021 America even wearing a face mask to prevent the spread of a deadly disease is a right vs. left situation.  

Political influence on antitrust laws bends their purpose and is certain to deliver results counter to the intentions of those who passed them. While political interference and abuse of antitrust law isn’t new, the nakedly transparent mission of legislators sitting on the far right of today’s right wing is. We don’t have to infer that they wish to defeat the “radical left” -- Hawley, Cruz, and Lee actually say so. For his part, candidate Sanders appeared, at least in campaign rhetoric, to see antitrust law as a political weapon, too.  

We can agree or disagree on the need and extent of reform, or the part “politics” has played in antitrust law and enforcement, or whether recent legislative measures only reflect the objectives of a political fringe, but when legislators openly announce their intentions to use reform and enforcement as blunt objects against the ideological opponents, and if they effectively get votes in the process, we have strayed into uncharted and dangerous waters.  

Edited by Tom Hagy for MoginRubin LLP.   

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