Biden order takes aim at big business

Focus put on competition to rev up economy, cut prices, aid consumers

President Joe Biden signs an executive order on competition in the economy Friday at the White House. Joining him are (from left) Transportation Secretary Pete Buttigieg, Federal Trade Commission Chairman Lina Khan, Health and Human Services Secretary Xavier Becerra, Commerce Secretary Gina Raimondo and Attorney General Merrick Garland.
(AP/Evan Vucci)
President Joe Biden signs an executive order on competition in the economy Friday at the White House. Joining him are (from left) Transportation Secretary Pete Buttigieg, Federal Trade Commission Chairman Lina Khan, Health and Human Services Secretary Xavier Becerra, Commerce Secretary Gina Raimondo and Attorney General Merrick Garland. (AP/Evan Vucci)

WASHINGTON -- President Joe Biden signed an executive order Friday aimed at spurring competition across the economy, encouraging federal agencies to take a wide range of actions, including more closely scrutinizing the tech industry, cracking down on high fees charged by sea shippers and allowing hearing aids to be sold over the counter.

"What we've seen over the past few decades is less competition and more concentration that holds our economy back," Biden said in the White House on Friday, shortly before signing the order, citing the agriculture, technology and pharmaceutical industries. "Rather than competing for consumers, they are consuming their competitors. Rather than competing for workers, they're finding ways to gain the upper hand on labor."

The order reflects the administration's growing embrace of warnings by some economists that declining competition is hobbling the economy's vitality, raising prices and reducing choices for consumers in key areas, while dampening pay and restricting freedom to change jobs for workers. Progressive groups celebrated it, while some business groups criticized it harshly.

The order includes 72 actions and recommendations that Biden said would lower prices for families, increase wages for workers, and promote innovation and faster economic growth. However, new regulations that agencies may write to translate his policy into rules could trigger legal battles.

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The order includes calls for banning or limiting noncompete agreements to help raise wages and banning excessive early termination fees by internet companies. It also calls on the Transportation Department to consider issuing rules requiring airlines to refund fees when baggage is delayed or in-flight services are not provided as advertised.

Another provision asks the Federal Communications Commission to reinstate net-neutrality rules for broadband providers. The order will also ask the FCC to adopt new restrictions on the practices of broadband internet providers like Comcast, AT&T and Verizon. Activists have long said consumers have too few choices and pay too much money for internet service.

The White House said Biden's order follows in the tradition of past presidents who took action to slow corporate power. Theodore Roosevelt's administration broke up powerful trusts that had a grip on huge areas of the economy, including Standard Oil and J.P. Morgan's railroads. Franklin D. Roosevelt's administration stepped up antitrust enforcement in the 1930s.

But experts noted that Biden's presidential initiative is hardly a mandate on competition.

"This is really more of a blueprint or agenda than a traditional executive order," said Daniel Crane, a law professor at the University of Michigan who focuses on antitrust issues. "This is a very broad and ambitious policy agenda for the Biden administration that offers lots of insights on the administration's direction and priorities, but there could be many a slip between the cup and the lip."

Biden's order includes a flurry of consumer-pointed initiatives that could lead to new federal regulations, but it also includes plenty of aspirational language that simply encourages agencies to take action meant to bolster worker and consumer protections.

Business and trade groups quickly expressed opposition, arguing that the order would stifle economic growth just as the U.S. economy is recovering from the coronavirus pandemic.

"Some of the actions announced today are solutions in search of a problem," said Jay Timmons, president and chief executive officer of the National Association of Manufacturers. "They threaten to undo our progress by undermining free markets and are premised on the false notion that our workers are not positioned for success."

NONCOMPETE CLAUSES

The order seeks to address noncompete clauses -- an issue affecting 36 million to 60 million Americans, according to the White House -- by encouraging the FCC to ban or limit such agreements, and ban occupational licensing restrictions, which can restrict workers' ability to find new work, especially across state lines. And it encourages the commission and the Justice Department to further restrict the ability of employers to share information on worker pay in ways that might amount to collusion.

Noncompete agreements often stop workers in a variety of industries from going to other employers for higher pay. Biden noted that in some states even fast-food franchises include such clauses for low-wage workers.

"Come on, are there trade secrets about what's inside the patty?" Biden said.

The order also takes aim at big technology companies Facebook, Google, Apple and Amazon by calling for greater scrutiny of mergers, "especially by dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by 'free' products, and the effect on user privacy."

IMPORTED DRUGS

The order will support states and tribal governments in importing lower-cost prescription drugs from Canada, push for regulations issued this year to allow hearing aides to be sold over the counter in drugstores, and ask the FTC and the Justice Department to more stringently scrutinize hospital mergers to ensure patients are not harmed by them.

The order calls on the Federal Maritime Commission to take action against shippers that it says are "charging American exporters exorbitant charges" and the Surface Transportation Board to require railroad track owners to "strengthen their obligations to treat other freight companies fairly."

The White House argues that rapid consolidation and sharp increases in pricing in the shipping industry have made it increasingly expensive for U.S. companies to get goods to market. In 2000, the largest 10 shipping companies controlled 12% of the market. They now control about 82%, according to the Journal of Commerce.

The World Shipping Council, an industry trade group, pushed back in a statement that "normalized demand, not regulation," is the way to answer rising costs.

"There is no market concentration 'problem' to 'fix,' and punitive measures levied against carriers based on incorrect economic assumptions will not fix the congestion problems," said John Butler, president and CEO of the council.

10,000 BANK CLOSURES

The order also notes that over the past two decades the U.S. has lost 70% of the banks it once had, with around 10,000 bank closures. Communities of color and rural areas have been disproportionately affected.

To begin addressing the trend, the order encourages the Justice Department as well as the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to update guidelines to provide greater scrutiny of mergers.

It also encourages the Consumer Financial Protection Bureau to issue rules allowing customers to download their banking data and take it with them when they switch banks.

The order includes several provisions that could affect the agricultural industry. It calls on the U.S. Department of Agriculture to consider issuing new rules defining when meat can use "Product of USA" labels.

It also encourages the FTC to limit farm equipment manufacturers' ability to restrict the use of independent repair shops or do-it-yourself repairs -- such as when tractor companies block farmers from repairing their own tractors.

Parts of the plan won some bipartisan praise Friday. Sen. Roger Marshall, R-Kan., a conservative, told KSN-TV that farmers were hurt by the consolidation of meatpacking plants and added "I do think that this executive order is going to help Kansas farmers and ranchers."

Information for this article was contributed by Aamer Madhani and Marcy Gordon of The Associated Press; by David McCabe and Jim Tankersley of The New York Times; and by Jeff Stein, Aaron Gregg and Cat Zakrzewski of The Washington Post.

President Joe Biden walks from the Oval Office to Marine One on the South Lawn of the White House in Washington, Friday, July 9, 2021. Biden is heading to Delaware for the weekend. (AP Photo/Susan Walsh)
President Joe Biden walks from the Oval Office to Marine One on the South Lawn of the White House in Washington, Friday, July 9, 2021. Biden is heading to Delaware for the weekend. (AP Photo/Susan Walsh)
President Joe Biden speaks before signing an executive order aimed at promoting competition in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. (AP Photo/Evan Vucci)
President Joe Biden speaks before signing an executive order aimed at promoting competition in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. (AP Photo/Evan Vucci)
President Joe Biden smiles as he arrives to speak in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. (AP Photo/Evan Vucci)
President Joe Biden smiles as he arrives to speak in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. (AP Photo/Evan Vucci)
President Joe Biden hands out a pen after signing an executive order aimed at promoting competition in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. Standing from left, Transportation Secretary Pete Buttigieg, Lina Khan, Chair of the Federal Trade Commission, Health and Human Services Secretary Xavier Becerra, Commerce Secretary Gina Raimondo, Attorney General Merrick Garland, National Economic Council director Brian Deese, obscured, and Jessica Rosenworcel, Acting Chairwoman of the Federal Communications Commission. (AP Photo/Evan Vucci)
President Joe Biden hands out a pen after signing an executive order aimed at promoting competition in the economy, in the State Dining Room of the White House, Friday, July 9, 2021, in Washington. Standing from left, Transportation Secretary Pete Buttigieg, Lina Khan, Chair of the Federal Trade Commission, Health and Human Services Secretary Xavier Becerra, Commerce Secretary Gina Raimondo, Attorney General Merrick Garland, National Economic Council director Brian Deese, obscured, and Jessica Rosenworcel, Acting Chairwoman of the Federal Communications Commission. (AP Photo/Evan Vucci)

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