At now-President-elect Donald Trump's 2024 campaign rallies, attendees would hold "Trump Will Fix It" signs. Here's hoping the antitrust policy that President Joe Biden excessively politicized is one of those "its." Trump's running mate, J.D. Vance, previously said he believes that Biden's appointee as chair of the Federal Trade Commission (FTC), Lina Khan, has done a good job with antitrust policy. I disagree.
For nearly 40 years, most antitrust scholars sensibly agreed that the government should base its treatment of potential corporate monopolization, mergers, and related issues on these actions' effect on "consumer welfare." This standard ensures that antitrust is used only to prevent businesses from undermining economic competition, preserving a market that drives prices down and product quality up on behalf of us consumers. Antitrust should not protect businesses from competition.
Upon taking control of the FTC, Khan discarded this standard and, along with it, decades of bipartisan agreement. Biden's Department of Justice and FTC quickly morphed antitrust into a tool for helping the White House achieve political aims that have nothing to do with keeping markets competitive.
Consider, for example, how the FTC pursued Elon Musk. A newly released report by the House Judiciary Committee delved into how Khan issued a consent decree against X (then Twitter) for no reason other than that Musk—whose existing business interests were in other industries—was the company's CEO. Khan "called for an immediate vote" just days after reporters announced the sale, which an FTC insider confirmed was what triggered the attention.
The Biden FTC also had no problem targeting companies that challenged its corporate donor base. For example, Khan released an interim report against pharmacy benefit managers (PBMs), companies that health plans hire to ensure they are receiving drugs at competitive costs. The major drug manufacturers have spent significant sums lobbying the government to challenge PBMs, even though the government's own research shows these companies save patients (and taxpayers) significant sums.
With the consumer welfare standard diminished, the facts didn't stop Khan from protecting drug companies, which have showered her boss with campaign contributions, from market discipline.
The shenanigans led Melissa Holyoak, a Republican FTC commissioner, to publicly dissent. She protested that "the Report was plagued by process irregularities and concerns over substance—or lack thereof—of the original order." So much so that "the politicized nature of the process appears to have led to the departure of at least one senior leader at the Commission."
If that's a "good job" in Vice President-elect Vance's view, we should be alarmed.
The Biden Department of Justice (DOJ) hasn't acted any more responsibly. For example, it sued RealPage, an AI-based software company that helps landlords come to terms with market pricing for their units, for facilitating alleged price gouging even though it had no evidence. The Wall Street Journal editorial board stated that "it doesn't require a Ph.D. in economics to understand that ballooning rents are caused by demand exceeding supply" and that "what's really going on [with this suit] is an attempt to distract voters from frustration over the Biden Administration's inflationary policies."
More recently, Biden's DOJ targeted Visa's debit card business over market share concerns despite the clear consumer benefits created by the company. These include secure, accessible services that millions of Americans rely on. Businesses and consumers have plenty of payment choices, but millions choose Visa for this reason. Rather than respecting those choices, Biden's DOJ is pursuing its anti-corporate agenda with little regard for consumers' welfare.
The solution to the DOJ and FTC's descent into political partisanship is straightforward: comprehensive reform. Come January, the Trump administration and Republican-controlled Congress must demand a recommitment to the consumer welfare standard. They must institute checks that prevent the DOJ and FTC from waging ideological warfare. Measures to ensure transparency and inter-commission collaboration, such as requiring the FTC to disclose the rationale and goals of its investigations, could also prove helpful.
It's hard to overstate the importance of appointing a better attorney general and FTC chair this time around. Coupled with new oversight measures, it could go far toward restoring fairness, protecting actual competition, and preventing rogue bureaucrats from imposing their will for personal or ideological gain. Most importantly, it would help restore the country's trust in its governmental institutions. Whether that will come to pass remains to be seen.
American businesses and consumers deserve a government that respects the rule of law. By simply refocusing the FTC and antitrust division of the DOJ on their foundational purposes, we can begin a new era of fair and impartial regulation that serves the public good. That's something we all should be able to get behind.
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