Latest news with #AmericaFirstAntitrust
Yahoo
08-05-2025
- Business
- Yahoo
Trump's Antitrust Enforcer Says 'Big Is Bad'
The anti–free market views of the Trump administration's antitrust enforcers are coming into full view, and it's boding poorly for the American economy. Abigail Slater, assistant attorney general for the Department of Justice's Antitrust Division, recently delivered her "America First Antitrust" speech, which outlined a populist agenda that punishes firms for being large. Days later, Mark Meador, commissioner of the Federal Trade Commission, published his "Antitrust Policy for the Conservative" essay, which evinces prejudice against big companies. "Big is bad," says Meador, who calls on conservatives to "reaffirm that concentrated economic power is just as dangerous as concentrated political power." Meador does not explain how market power is morally analogous to political power and the use of coercion but challenges conservatives to oppose bigness in private business the way they do in government. But there's good reason to be against one and not the other. Increasing the size and scope of government entails a commensurate reduction of the private sphere and personal liberty; Microsoft, Walmart, and Häagen-Dazs increasing their market shares does not. Meador disagrees, describing antitrust law as the means to prevent "anarchistic private tyranny" and encourages conservatives to "reject a laissez-faire or libertarian approach to antitrust law." Meador associates the libertarian approach principally with legal scholar Robert Bork's consumer welfare standard, which holds that the Sherman Antitrust Act (1890), the oldest antitrust statute enforced by the DOJ and FTC, was intended to and should promote economic efficiency. Meador rejects Bork's understanding of consumer welfare as economic efficiency, narrowly redefining it as "trading partner surplus." Replacing a holistic conception of consumer welfare with Meador's myopic one will prevent even economically efficient mergers and acquisitions from taking place, retarding innovation and productivity—a cost that Meador is willing for consumers to pay. Meador says that a conservative approach to antitrust law should be "more concerned with avoiding Type II errors [false negatives] than Type I errors [false positives]." This means antitrust officials should be more worried about accidentally allowing anticompetitive mergers and acquisitions than preventing competitive ones. Slater, however, lauded antitrust for its ability "to make targeted, incisive cuts to remove the cancer of collusion and monopoly abuse [rather than imposing] ex ante regulations." Slater praises antitrust for minimizing unnecessary economic intervention, which allows firms to serve consumers and expand the economic pie. Meador contradicts the DOJ's top antitrust official by calling for precisely the opposite. Meador describes permissionless innovation as a progressive impulse and says, "We do not celebrate the inexorable forward march of progress precisely because not all that is innovative is good." Skepticism of innovation recalls the Biden administration's permission-slip economy, which cost the economy an estimated $1.8 trillion. Meador also observes that "monopolists…often innovate to entrench and protect their monopoly rather than disrupt it." This is true; firms innovate to differentiate their products to obtain and retain pricing power to increase their profits. For example, Apple introduced the graphical user interface in January 1983 to steal Microsoft's market share, whose MS-DOS was a cumbersome command-line operating system. The primary beneficiary of such innovation is the consumer; the firm's motivation is irrelevant. Moreover, the example Meador cites as evidence of innovation not benefiting the consumer is that which profits from a government-granted monopoly over its intellectual property: the pharmaceutical industry. The solution to this inefficiency is less economic intervention by the state, not more of it. When firms are incapable of differentiating their products through in-house innovation, "there is still the possibility of acquisition to obviate the competitive threat," says Meador, citing the technology sector as an example. Meador recognizes that "the potential for acquisition has led to an explosion in VC funding for start-ups" and says this has diminished "truly disruptive innovation." While economists don't know if acquired startups' innovations reached their "full potential," Big Tech's Magnificent Seven—Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta, and Tesla—accounted for over half of the S&P 500 index's 25 percent return and one-third of total U.S. market capitalization in 2024. Cracking down on Big Tech acquisitions decreases the expected profitability of acquiring startups (as antitrust enforcers intend), thereby disincentivizing entrepreneurship and innovation as an unintended result. Meador quotes Sen. John Sherman—the namesake of the aforementioned act, which has been used by the Trump and Biden administrations to prosecute Alphabet for its successful search engine (Google)—who said, "If the concentrated powers of this combination are entrusted to a single man, it is a kingly prerogative, inconsistent with our form of government." Meador, like Sherman, does not identify a principle to determine when the exercise of private property rights amounts to the exertion of a "kingly prerogative." If anyone is exercising such a prerogative it is President Donald Trump, who is using political power to act as "a king over the production, transportation, and sale of any of the necessaries of life," as Sherman was so worried, with his unconstitutional tariffs, subsidies, and industrial policy that arbitrarily reallocate capital to favored industries. Yet, the New Right opposes free trade even as they admit Trump's protectionism will impoverish Americans. Meador is unqualifiedly right that economics cannot identify what a person's or society's ends should be. He is also right that economics (like all sciences) "depends upon various assumptions and caveats, all of which can and often is rendered moot by marketplace realities and 'facts on the ground.'" As such, it is fallacious to claim that economic analysis of the anticipated effects of mergers, acquisitions, and other firm conduct can prescribe what the government should do—it can only attempt to describe what will happen. The limitations of the consumer welfare standard are reason for humility in its application, not its redefinition. Meador concludes conservatives must reject what he says are libertarianism's lies, but conservatives should reject Meador's false equivalency of economic and political power. The post Trump's Antitrust Enforcer Says 'Big Is Bad' appeared first on
Yahoo
01-05-2025
- Business
- Yahoo
Trump's 'America First Antitrust' Policy Will Put America Last
Abigail Slater delivered her first public address as assistant attorney general for the Antitrust Division of the Department of Justice on Monday, where she argued for an "America First Antitrust" policy based on patriotism, textualism, and respect for precedent and the rule of law. Speaking at the University of Notre Dame, Slater claimed her antitrust regime will empower "America's forgotten men and women to shape their own economic destinies in the free market." In reality, her populist antitrust agenda will retard American innovation and economic growth. Slater, who was an economic policy adviser to Vice President J.D. Vance when he was in the Senate, opened her remarks by thanking President Donald Trump, who has "assailed the use of 'market power to crack down on the rights of so many Americans,'" for giving her "the chance to defend the American people's rights at this critical juncture in our history." Slater explains that the Trump administration is "undertaking deregulation that will unleash innovation in AI and other technologies" but celebrates the DOJ's recent victory in the Google ad tech case, saying, "Our teams more often than not win the battle on behalf of the American people." Embroiling Big Tech firms in expensive antitrust suits stifles innovation by decreasing capital available for R&D and discouraging startup acquisition. Slater also condemns the "global labor arbitrage" for trading "American jobs for cheap manufacturing abroad" and "growing profit margins [that] diverted the economic gains for many goods from American consumers and workers to our coastal elites." But the facts contradict Slater's story: The percentage of U.S. households making $35,000 or less decreased from 1967 to 2017, while those making $100,000 or more increased, as explained by Mark Perry, senior fellow emeritus at the American Enterprise Institute. She also references the decline of manufacturing since the late 1960s, but nationwide manufacturing output steadily increased from 1970 to 2007, where it has since stabilized. Slater's skepticism of free markets was most prominently displayed when she explained the principles that will guide her approach to antitrust enforcement at the Justice Department. To Slater, the first objective for antitrust enforcers should be protecting individual liberty from government and corporate tyranny. While Slater rightly identifies freedom of choice as necessary for flourishing, she wrongly likens today's dominant firms to the government-granted monopolies of the colonial period, such as the British East India Company. Brian Albrecht, chief economist at the International Center for Law & Economics, says "It is very strange to compare a government-granted monopoly to any of the relevant 'monopolies' people worry about today." Ethan Yang, an adjunct research fellow at the American Institute for Economic Research, agrees, telling Reason, "Many of the so-called dominant firms that are in the antitrust crosshairs today have achieved their positions almost entirely on enterprise." The British East India Company only "maintained its position because it was granted a legal monopoly on all trade occurring in a certain part of the world by royal charter." Second, she believes antitrust enforcement should respect binding precedent and the original meaning of the statute. Slater says antitrust agencies should only enforce laws actually passed by Congress—not laws they wish Congress had passed. Slater invokes this principle to argue that "antitrust laws protect labor market competition." Antitrust has been used in the context of labor, explains Yang, but "its application is tricky because…it is much more difficult to classify as a market which is necessary to measure competition and the alleged anticompetitive effects of restrictive labor practices." Moreover, Slater's claim that labor antitrust is deeply rooted in common law tradition and Supreme Court precedent is wrong because "most of the labor antitrust has happened in the last 15 years," according to Albrecht. Slater's third principle is that antitrust litigation can serve as a substitute for regulation. Slater likens the former to a scalpel and the latter to a sledgehammer. Even though Slater rightly recognizes that "anti-competitive regulation can be co-opted by monopolies and their lobbyists" and "sap the free market of dynamism," she does not admit that antitrust's susceptibility to capture and do the same. The empirical record unambiguously shows that "antitrust, at least before the development of the consumer welfare standard, was employed to help competitors and a form of rent seeking," says Albrecht. Yang adds that, while antitrust enforcement may be less susceptible to corporate capture than regulation, it is "highly ideological and partisan because lawsuits can be launched at will by…agency leaders who often take direct orders from the President." Slater credits New Right intellectuals Oren Cass, founder of American Compass, and Sohrab Ahmari, founder of Compact magazine, for "driving the realignment in antitrust policy." Slater's "wish to move away from [a] deeply technocratic and elitist mindset" confounds her support of the New Right, whose economic program is explicitly technocratic, viewing trade and industrial policy as tools policymakers can and ought to use to remake the economy from on high. Slater is right that "personal liberty and economic liberty are closely connected." But her activist antitrust ideology will violate liberty, not protect it. The post Trump's 'America First Antitrust' Policy Will Put America Last appeared first on
Forbes
29-04-2025
- Business
- Forbes
Justice Department Introduces 'America First Antitrust' Policy
Abigail Slater, US assistant attorney general nominee for US President Donald Trump, during a Senate ... More Judiciary Committee confirmation hearing in Washington, DC, US, on Wednesday, Feb. 12, 2025. Democratic senators pressed President Donald Trump's nominee for Deputy Attorney General, Todd Blanche, on politicization of the Justice Department and recent efforts to gather names of FBI agents who worked on cases related to the Jan. 6, 2021, attack on the US Capitol. Photographer: Daniel Heuer/Bloomberg Justice Department Assistant Attorney General for Antitrust Gail Slater introduced 'America First Antitrust' in her first formal address as DOJ's chief antitrust enforcer. Her remarks, delivered at Notre Dame Law School on April 28, explained that this policy centers on protecting individual liberty from both government and corporate tyranny. While details will be filled in later, Slater's speech stated that America First antitrust is law enforcement, not regulation. She also emphasized that anticompetitive government regulation can serve corporate interests rather than the American people and drown out new innovations. Key Principles Slater said that America First Antitrust will have 3 key features: Protecting Individual Liberty Slater outlined 'the first principle of America First Antitrust – antitrust enforcement serves the deep-rooted conservative goal of protecting individual liberty from the tyranny of coercive monopoly power.' In her view, antitrust 'serves those goals where it matters most, to protect our liberty online and to ensure that we protect Americans on pocketbook issues such as housing, healthcare, groceries, transportation, insurance, entertainment, and similar markets that directly impact their lives.' Slater grounded antitrust in American history. She noted that in the 18th century, American concerns about abusive royally-granted monopolies (such as the East India Company whose tea was destroyed in the Boston Tea Party) played a role in spurring the American Revolution. In the 19th century, public concern turned to 'a new kind of monopoly—a private empire of oil, railroad, and agricultural robber barons.' Congress took note and enacted the Sherman Antitrust Act of 1890, which 'preserves liberty by promoting economic competition that benefits consumers, workers, inventors, and other trading partners in the free markets.' According to Slater, Sherman Act principles now need to be applied to new sorts of digital platform monopolies, which 'control not just the prices of their services, but the flow of our nation's commerce and communication. These platforms play a critical role in our digital public square.' Advancing the Rule of Law The second principle is that antitrust law enforcement should adhere to the rule of law and respect binding precedent and the original meaning of the statutory text. According to Slater, this principle means that: Supporting Deregulation The third principle is a preference for litigation over regulation. Slater explained how anticompetitive government regulations unnecessarily sap the free markets of dynamism. Aggressive antitrust enforcement supports a competitive process that enables markets to regulate themselves, providing a bulwark against market power that often leads to regulatory intervention. She emphasized that antitrust is a scalpel, not a sledgehammer: '[Antitrust] imposes government obligations only on parties that violate the law, and only for the limited time necessary to restore competition. In contrast, ex ante regulations cover all parties in an industry for time immemorial, permanently distorting the free market rather than merely curing diseases that were destroying the market.' What's more, regulation too often serves private special interests: 'Worse still, a system of anti-competitive regulation can be co-opted by monopolies and their lobbyists, such that the state's power actually amplifies, rather than diminishes, corporate power, and leads to the proliferation of government regulations that serve corporate interests rather than the people and drown out new innovations.' Slater concluded by describing the Trump Administration's new deregulatory initiative: 'To combat against such laws and regulations that stifle rather than promote competition, we have launched the Anticompetitive Regulations Task Force. Consistent with the Trump Administration's deregulatory efforts, the Antitrust Division's Task Force will seek to identify and eliminate laws and regulations that undermine the operation of the free market and harm consumers, workers, and businesses. We look forward to working with the FTC and with partner agencies throughout the government on these efforts.' A Forward Look The Slater speech is a strong signal that the Trump Administration will keep pursuing aggressive antitrust enforcement, especially with respect to digital platforms, high tech, and markets that directly affect consumers' pocketbooks. Restraints that harm American labor also will get close scrutiny. Moreover, while specifics will need to be fleshed out, it is clear that the DOJ (and, it may be presumed, the Federal Trade Commission) will feel free to rely on older established precedents in bringing cases, which will not be 'displaced' by economics. Furthermore, the Administration will strongly prefer litigation to regulation in dealing with competitive problems. Finally, and perhaps most significantly, the Administration will enlist the DOJ and the FTC in an effort to eliminate existing regulations that undermine competition. This deregulatory approach will, if fully implemented, go far beyond the regulatory reform initiatives of prior administrations. Given the high costs of U.S. overregulation, the success of this endeavor could confer major benefits on the American economy.
