On July 9, 2021, President Biden signed Executive Order 14036 – Promoting Competition in the American Economy. The wide-ranging Executive Order includes 72 initiatives that aim to increase enforcement of existing antitrust laws and other consumer protection regulations. The Order targeted at least 15 federal departments, offices, and agencies, potentially affecting a wide panoply of American industries. It is designed to restore competition in the American economy and reverse the effects of corporate consolidation. The Biden Administration hopes this will drive down prices for consumers, increase wages for workers, and facilitate innovation.
The Executive Order proposes to address these problems by “enforc[ing] the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony.” The Executive Order also “reaffirms that the United States retains the authority to challenge transactions whose previous consummation was in violation of the [antitrust laws.]”
This Executive Order represents a watershed moment in competition policy in the United States, as the White House has directed the entire U.S. government to more aggressively enforce the antitrust laws. The Executive Order has far-reaching implications for antitrust enforcement and communications law alike as it calls for more rigorous antitrust enforcement by the Department of Justice and the Federal Trade Commission, and seeks new consumer protection regulations through the Federal Communications Commission, the Federal Trade Commission, and the Departments of Transportation and Commerce.
White House Competition Council
The Executive Order establishes the White House Competition Council to coordinate the White House response to anticompetitive behavior, overconcentration, monopolization, and unfair competition. The Council will work across agencies to provide a coordinated response to the Order. The Council will also work with each agency to ensure that agency operations are conducted in a manner that promotes fair competition. The Council will not, however, discuss any current or anticipated enforcement actions.
Attorney General Merrick Garland released a statement promising to “begin implementing the interagency collaborations called for in the Executive Order, and we look forward to helping our agency partners use their regulatory authorities to bring greater competition to the U.S. economy.”
More Vigorous Antitrust Enforcement
The Executive Order calls on the Department of Justice, andthe FTC, to “fairly and vigorously” enforce the antitrust laws. The Justice Department and FTC are encouraged to review the horizontal and vertical merger guidelines, which they have already promised to do.
Where there is overlapping jurisdiction over particular cases, conduct, transactions, or industries, agencies are encouraged to coordinate their efforts with respect to: (i) investigations of conduct potentially harmful to competition; (ii) oversight of proposed mergers; and (iii) design, execution, and oversight of remedies. Such cooperation can include sharing information and industry data and and cooperating with any concurrent DOJ or FTC oversight activities.
FTC Chair Lina Khan and the Acting Assistant Attorney General for Antitrust Richard Powers issued a joint statement promising to “jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law.”
Seven Major FCC Rulemakings Requested Including Open Internet Protections and More Aggressive Broadband Regulation
The Executive Order encourages the FCC to adopt a set of seven rulemaking proceedings.
- Most notably, the FCC is encouraged to re-adopt the Net Neutrality or Open Internet rules that were in force until 2018. Specifically, the Executive Order seeks to prevent Internet Service Providers from “discriminatorily slowing down internet access” by restoring “the net neutrality rules undone by the prior administration.”
- The FCC is also encouraged to conduct future spectrum auctions under rules that are designed to help avoid excessive concentration of spectrum license holdings, so as to prevent spectrum stockpiling, warehousing of spectrum by licensees, or the creation of barriers to entry, and to improve the conditions of competition.
- The Executive Order supports Open Radio Access Networks (O-RAN or Open RAN) by providing support for the continued development and adoption of standards, protocols and software. This is viewed as a way to promote increased openness, innovation, and competition in the markets for 5G equipment.
- The Executive Order encourages the FCC to prohibit unjust or unreasonable early termination fees for end-user communications contracts. This would allow consumers to more easily switch providers. This initiative could apply to cable operators, satellite services providers, broadband and Internet service providers, and wireless and wireline telecommunications companies, among others.
- The Executive Order requests that the FCC require broadband service providers to display a broadband consumer label, such as the one described in a Commission Public Notice released on April 4, 2016 (DA 16–357). This would give consumers clear, concise, and accurate information regarding provider prices and fees, performance, and network practices.
- The Executive Order proposes that the FCC initiate a rulemaking to require broadband service providers to regularly report broadband price and subscription rates to the FCC. The FCC would then disseminate that information to the public to improve price transparency and ensure a functioning market.
- Finally, the Executive Order calls on the FCC to prevent landlords and cable and Internet service providers from inhibiting tenants’ choices among providers, expanding the Commission’s previous actions against exclusive contracts for multiple dwelling units.
All four FCC commissioners issued statements responding to the Executive Order:
- Chairwoman Rosenworcel, who attended the signing ceremony at the White House, stated that she welcomed the order and President Biden’s effort to “enhance competition in the American economy and in the nation’s communications sector.”
- Commissioner Starks also applauded the order, stating that it would spur the FCC to help “fight for a more vibrant and inclusive broadband marketplace.”
- The two Republican Commissioners, though, were less sanguine about the order. Commissioner Carr disagreed with its call to reinstate the “Obama-era net neutrality rules,” stating it “heads down the wrong path when it comes to strengthening competition in the broadband market.” Commissioner Simington, who also attended the signing, welcomed its call to increase competition, but, similar to Commissioner Carr, thought reviving the net neutrality rules would be an error; instead, he favors a “bipartisan effort in Congress.”
FTC Asked to Address Major Technology Company Practices
Two of the most prominent requests of the FTC are aimed at “Big Tech” companies. Specifically, the Executive Order asks the FTC to “address persistent and recurrent practices that inhibit competition” regarding unfair data collection and surveillance processes, which “may damage competition consumer autonomy, and consumer privacy,” as well as unfair competition in the major Internet marketplaces.
Additional regulatory requests are for the FTC to address unfair occupational licensing restrictions; unfair anticompetitive restrictions on third-party or self-repair of items; unfair anticompetitive drug industry conduct or agreements; unfair tying or exclusionary practices in real estate listings; and “any other unfair industry-specific practices that substantially inhibit competition.” The FTC is also asked to consider rulemaking to curtail the “unfair use of non-compete clauses” and other contractual provisions that may unfairly limit worker mobility.
In addition to these requests for rulemaking, the FTC is requested to consider working with the Department of Justice to consider revising the horizontal and vertical merger guidelines, and the Antitrust Guidance for Human Resource Professionals.
DOJ to Consider IP/Antitrust Issues
The DOJ encouraged, together with the Secretary of Commerce, to consider revisions to their policy position on the intersection of IP and antitrust law, including by considering revisions to the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. DOJ is also encouraged to adopt a plan for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act.
Department of Transportation to Promote Drones
The Executive Order directs the Department of Transportation to facilitate innovation in the drone market to increase United States market leadership, while also ensuring safety, providing security and privacy.
Department of Commerce to Study Apps
The Executive Order directs the Secretary of Commerce, in consultation with the Department of Justice and the FTC, to conduct a study on the mobile application ecosystem and develop recommendations for improving competition, reducing barriers to entry, and maximizing user benefit. The study must be completed by July 9, 2022.
The Executive Order touches on nearly every aspect of the economy with its 72 initiatives. Its proposals for the communications sector alone are far-reaching and ambitious. They foreshadow an active time for regulatory action and vigorous antitrust enforcement.