Biden targets Big Tech in sweeping new executive order cracking down on anti-competitive practices

Business

Fox Business 09 July, 2021 - 10:11am 17 views

President Joe Biden on Friday will sign a new executive order aimed at cracking down on anticompetitive practices in Big Tech, labor and numerous other sectors.

The sweeping order, which includes 72 actions and recommendations that involve more than a dozen federal agencies, is intended to re-shape the thinking around corporate consolidation and antitrust laws, according to a White House fact sheet.

Those wide-ranging goals and initiatives include:

"The impulse for this executive order is really around where can we encourage greater competition across the board," White House chief economic advisor Brian Deese told CNBC's Ylan Mui in an exclusive interview that aired earlier Friday morning.

Biden is set to sign the executive order at the White House at 1:30 p.m. ET, according to his schedule.

Through its tech-related actions, Biden's order aims to make the case that the biggest companies in the sector are wielding their power to box out smaller competitors and exploit consumers' personal information, Mui said.

The order will call for regulators to enact a slew of reforms, including increasing their scrutiny of tech mergers and putting more focus on maneuvers such as "killer acquisitions," in which firms acquire smaller brands to take them out of the market.

The tech giants' tightened grip has led to a decline in innovation, Deese told Mui.

Those platforms have "created significant problems," Deese said. That includes "problems for users in terms of privacy and security" and "problems for small businesses in terms of entering markets," he said.

The executive order "is not just about monopolies," Deese said, "but it's about consolidation more generally and the lack of competition when you have a limited set of market players."

He noted that some research suggests wages are lower in more concentrated markets that are dominated by just a handful of firms. A White House fact sheet cites a May 2020 paper from the Journal of Human Resources, which used CareerBuilder.com data to find that market consolidation suggests a decrease in wages by double-digit percentages.

The order will be unveiled just a few weeks after the House Judiciary Committee voted to advance six antitrust bills aimed at revitalizing competition in the tech sector.

The bills, which would make it harder for dominant firms to complete mergers and outlaw certain common business models for such firms, have faced significant bipartisan pushback from those concerned that they don't go far enough or will have unintended side effects.

In late June, a judge threw out complaints from the Federal Trade Commission and a group of state attorneys general alleging Facebook has illegally maintained monopoly power.

Biden's executive order also calls on the FTC to craft new rules on Big Tech's data collection and user surveillance practices, and asks the agency to prohibit certain unfair methods of competition on internet marketplaces.

The order could provide some relief to small and medium-sized businesses that have complained of the allegedly crippling grip of tech firms such as Amazon, Apple, Facebook and Google over digital markets.

Biden's executive order doesn't impose its will on Big Tech companies unilaterally, and instead frequently calls on independent agencies to take action.

But new FTC chair Lina Khan, a Biden appointee who at 32 became the youngest person ever to hold the role when she was sworn in last month, has already carved out a reputation as a vocal advocate for reforming and beefing up regulations on tech giants.

Amazon is calling for Khan to be recused from ongoing probes of its business, arguing she lacks impartiality and accusing her of repeatedly saying the company is "guilty of antitrust violations and should be broken up."

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Biden to Sign Executive Order to Promote Economic Competition in U.S.

Bloomberg Quicktake: Now 09 July, 2021 - 12:10pm

President Biden weighs new rules cracking down on airline fees in executive order

USA TODAY 09 July, 2021 - 10:34am

The airline fee directives are part of a broad executive order by President Joe Biden aimed at anti-competitive practices of big business.

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American Airlines just canceled 1,000 flights. Here's everything you need to know about airports, flight cancellations, refunds, restrictions. USA TODAY

WASHINGTON — President Joe Biden will order the Transportation Department on Friday to consider new rules to crack down on fees enforced by airlines that travelers have long complained are costly tack-ons for sometimes lackluster service. 

Biden will direct the department to consider clear rules that would require the refund of fees when baggage is delayed or when services such as the plane's Wi-Fi or in-flight entertainment system are malfunctioning or not provided.

The president will also direct the department to consider rules that would require airlines to clearly disclose baggage, change and cancellation fees for consumers.

The directives – although not binding – are part of a broad executive order that Biden will sign Friday afternoon taking aim at monopolies in industries that include agriculture, technology, health care, banking and shipping. The order includes 72 initiatives, regulations and directives involving more than a dozen federal departments to promote greater economic competition. 

The U.S. airline industry is dominated by four companies: American, Southwest, Delta and United. 

"Reduced competition contributes to increasing fees like baggage and cancellation fees," the White House said in a statement. "These fees are often raised in lockstep, demonstrating a lack of meaningful competitive pressure, and are often hidden from consumers at the point of purchase."

The top 10 airlines collected $35.2 billion in fees in 2018, according to the White House, a massive increase from the $1.2 billion collected in 2007.

A lack of competition in the airline industry "reduces incentives to provide good service," the White House said, noting airlines were late delivering 2.3 million checked bags in 2019, according to data from the Transportation Department. 

Biden's order comes after the Transportation Department already proposed airlines be required to refund fees on checked baggage if the bags aren't delivered to passengers quickly enough. If approved after a lengthy regulation-writing process, the new policy could go into effect next year.

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