A New Day, A New Deal: The Biden Administration’s Antitrust Revolution



The Biden administration is “supercharging” antitrust enforcement with an expansive view of what constitutes anti-competitive behavior. While much attention has been paid to antitrust scrutiny of large technology companies, also in the crosshairs of the Biden administration are labor markets, agricultural markets and healthcare markets (prescription drugs, hospital consolidation and insurance) according to President Biden’s July 9 Executive Order on Competition2. The order is one of several recent developments that signal an antitrust revolution is underway. A central theme of this revolution is that competition laws can serve as a broad panacea to solve many societal problems, including privacy concerns.3

The Federal Trade Commission (“FTC”) is now led by Lina Khan, a 32-year old academic, who believes that “the current framework in antitrust – specifically its pegging competition to ‘consumer welfare,’ defined as short-term price effects – is unequipped to capture the architecture of market power in the modern economy.”4 Within her first month as chair of the FTC, Khan has moved quickly to revise guidance and protocols that may have otherwise limited expanded enforcement against broadly defined unfair competition, including predatory, exploitative and coercive practices. Transformation of current antitrust policy is also supported by pending legislation that calls for sweeping reform to “reinvigorate America’s antitrust laws and restore competition to American markets.”5

At the heart of the revolution is a sense that antitrust enforcement has failed to address anti-competitive acts by (i) limiting competitive effects to pricing and (ii) the general acceptance that driving a hard bargain is a lawful business practice as long as it doesn’t leverage market power in another relevant market. With a focus on pricing effects, modern antitrust analysis recognizes economic efficiency and the ability to lower costs – which can be passed on to consumers through lower prices – as redeeming pro-competitive benefits. However, the Biden administration appears keen to return to historical antitrust paradigms seen in the 1960s where maintenance of fragmented industries and markets was of paramount importance, even at the cost of higher prices.6

Biden’s Executive Order on Competition

On July 9, President Biden issued an Executive Order on Competition (“EOC”) and established a White House Competition Council to monitor progress on finalizing the initiatives in the order. The EOC encouraged enforcement efforts particularly in labor markets, agricultural markets, healthcare markets (prescription drugs, hospital consolidation and insurance), and the tech sector.7 In particular, the President announced a policy of greater scrutiny of mergers, “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” and “prior bad mergers that past administrations did not previously challenge.”8

In technology markets, President Biden encouraged the FTC to establish rules on (i) surveillance and the accumulation of data and (ii) barring unfair methods of competition in internet marketplaces, particularly where “large platforms’ power give them unfair opportunities to get a leg up on the small businesses that rely on them to reach customers.”9 The EOC calls for the FTC to use its rule-making authority to ban “pay for delay” and similar agreements among drugmakers and for the FDA to combat high prescription drug prices and price gouging. In agriculture, the EOC points to concentration in markets for seeds, equipment, feed and fertilizer. In labor markets, the EOC moves to prohibit non-compete clauses and unnecessary occupational licensing restrictions that impede economic mobility.10

Merger Guidelines

Also on July 9, FTC Chair Khan, within one month of being sworn in, issued a joint statement with Acting Assistant Attorney General Richard A. Powers of the Antitrust Division of the Department of Justice to consider revisions to the Merger Guidelines.11 We anticipate that federal antitrust authorities plan to significantly revamp the public guidance relating to both horizontal and vertical mergers. Chair Khan has raised concerns that current vertical merger enforcement has been over-permissive and not adequately addressed concerns regarding foreclosure and leverage.12 Khan has criticized the Reagan administration’s 1982 Merger Guidelines for its “radical departure” from an emphasis on “preserving and promoting market structures conducive to competition” to a disproportionate embrace of economic factors relating to price increases and output restrictions that has guided modern antitrust analyses to date.13 Instead, she calls on evaluating the neutrality of the competitive process and the openness of the market by examining: (i) entry barriers, (ii) conflicts of interest, (iii) the emergence of gatekeepers and bottlenecks, (iv) the use of and control over data, and (v) the dynamics of bargaining power. More emphasis would be placed on the competitive process and market structure, including what lines of business a firm is involved in and how those lines of business interact and whether the structure of the market creates or reflects dependencies. Chair Khan’s scholarly work has focused on pre-1980s antitrust analyses when courts, concerned with protecting small businesses and avoiding the adverse political consequences that may arise from the aggregation of economic power, blocked mergers with 5 percent share increases to prevent increased market concentration in its incipiency.14 President Biden’s remarks in the EOC echo this historical sentiment as he discusses “threats from growing corporate power” and the need to give “the little guy a fighting chance.”15

FTC’s ‘Public’ Meeting - Rescinding Section 5 ‘Unfair Competition’ Guidance and Expanding FTC Rulemaking Ability

On Thursday, July 1, FTC Chair Khan held a Commission meeting, that the public could observe, to discuss and vote on several significant agenda items. All votes, including on whether to first seek public comment via a 45-day comment period, were decided 3-2 along party lines. Notably, the FTC majority (i) voted to rescind the Obama-era Section 5 Policy Statement on unfair competition and (ii) removed Commission oversight from substantial aspects of Commission business in favor of granting the Chair more power to act unilaterally. These actions were taken after only one week of notice and opportunity for deliberation by the other four Commissioners. Meaningful deliberation was further constrained by the ‘public’ nature of the meeting that one commentator likened to an “emperor with no clothes” charade where the emperor bares all knowing no one would stop him.

Section 5 of the FTC Act prohibits “unfair methods of competition” and “unfair or deceptive acts or practices.”16 The Section 5 Policy Statement on “unfair methods of competition” broadly provided that the Commission would be guided by the public policy of promoting consumer welfare and would balance the likely competitive harm against procompetitive justifications when enforcing “unfair methods of competition” under Section 5.17 The consumer welfare standard is premised on economic analysis. Many fear that the act of rescinding the Section 5 Policy Statement signals the FTC’s intention to move away from the predictable and administrable consumer welfare standard, resulting in politically motivated enforcement that would produce unpredictable outcomes. As a former FTC Chair had warned, the possibilities for expansive use of Section 5 appear vast and it could easily accommodate a host of controversial theories, including incipient violations of the antitrust laws and unfair competition through violation of various laws outside of the antitrust context, such as privacy.18 The courts had rebuffed the FTC when it last tried to reach beyond settled principles of antitrust law in asserting its Section 5 authority.19

The FTC majority also removed limitations on its rule-making ability under the Magnuson-Moss Warranty Act, recalling the FTC’s ability to promulgate “trade regulation rules” as it had with more than a dozen rulemakings in the mid-1970s. The changes include granting the FTC Chair the power to serve as or designate the Chief Presiding Officer in rulemaking proceedings. The Presiding Officer oversees the fair adjudication of the hearing process and makes independent recommendations to the Commission based on the relevant and material evidence. This role had been filled by the Chief Administrative Law Judge to help safeguard independence in response to public perceptions in the 1970s that the Presiding Officer was a puppet of agency management, and thus, that outcomes were biased and predetermined. The Chair was also granted the power to determine the list of disputed issues of material facts, which issues will be discussed at the hearing, and which parties will be permitted to testify.

The FTC majority also eliminated requirements for additional public comment periods, publication of a staff report containing their analysis and recommendations, and other opportunities for the public to weigh in on disputed issues of material fact. Other changes included allowing a single Commissioner, rather than majority vote of the Commission, to authorize compulsory process to initiate costly investigations.

The Republican Commissioners expressed strong words of caution - reminding the Commission that the FTC’s 1970s rulemaking spree had introduced “excessive ambiguity, confusion and uncertainty” and had caused significant backlash against the “national nanny.”20 The Republican Commissioners pled that the Chair’s “abrupt and chaotic” actions disregarded the wisdom of experience, especially as the rushed open meeting did not allow open dialogue between the Commissioners, their law advisors, or experienced staff attorneys. Commissioner Wilson urged Chair Khan to acknowledge the mistakes of the past. As an example, she pointed out that while Chair Khan repeatedly (12 times) pointed to railroad regulation as a model for Big Tech in her work in the House Judiciary Committee’s Report, nowhere “does the Report mention the fact of the bipartisan repeal of this regulatory framework because it harmed consumers and stifled innovation; neither does it mention the benefits that came from deregulation.” Commissioner Wilson warned that the changes provide for “aggressive, unbounded rule making that can transform entire industries without clear theories of law violations and empirical foundations for recommended regulatory burdens.”21 Commissioner Phillips noted his deep concerns “that the Commission’s action today unleashes unchecked regulatory authority on businesses subject to Section 5 while keeping those businesses in the dark about which conduct is lawful and which is unlawful.”22


As the Biden administration embarks on these reform efforts, it will need to grapple with how to provide the business community with sufficient guidance to assess the legal consequences of contemplated actions so as not to retard sound business planning. For example, to what extent can businesses re-invest in innovation without fear of allegations of predatory behavior? Could competitors free-ride on rivals’ superior business acumen and investments by weaponizing future restrictions on refusals to deal? As Commissioner Wilson points out, “regulations, even well-intentioned ones, impose costs that stifle innovation, raise the costs of doing business, limit consumer choice and increase the prices that consumers must pay, and ultimately undercut America’s global competitiveness.”24

An “I know it when I see it” approach would undermine business productivity and progress while a strict structural approach based on definition of a relevant market and calculation of market shares could fail to capture the economic complexities that may impact competition, especially where “dominance” may arise from overall corporate control rather than market power in a specific narrowly defined product or to the contrary, competition outside the relevant market (e.g., upstream or downstream) significantly constrains competitive decision-making in the alleged relevant market. Legislators, such as US Senator Amy Klobuchar (D-MN) and New York State Senator Michael Gianaris (D), have introduced, respectively, federal and state legislation that would remove the need to define relevant markets if direct evidence of anticompetitive effects is available. This approach is consistent with modern antitrust analysis as encapsulated in the 2010 Horizontal Merger Guidelines, but what constitutes anticompetitive effects if the consumer welfare standard is discarded?

It is a noble undertaking to try to improve that which one thinks is broken, but it must be done carefully with an unbiased analysis of the lessons learned through experience and respectful consideration of opposing viewpoints. Due process rights need to be respected and upheld. Opportunity for, and contemplation of, public comments could facilitate democratic reform with a lasting legacy. But, failure to address key concerns regarding the chilling effect on the economy of expansive and unpredictable enforcement could result in a future backlash that would unravel steps taken by the Biden administration.

One thing is clear for now: Businesses in all industries should evaluate business practices and potential transactions through a changed lens.


1 See Lina M. Khan, Amazon’s Antitrust Paradox, 126 YALE L.J. 710, 746 n.188 (Jan. 2017)(citing President F. Roosevelt: “The enforcement of free competition is the least regulation business can expect.”) [hereinafter Amazon’s Antitrust Paradox].
2 The White House, FACT SHEET: Executive Order on Promoting Competition in the American Economy, July 9, 2021, available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/ [hereinafter EOC FACT SHEET]
3 Executive Order 14036 on Promoting Competition in the American Economy, July 9, 2021, available at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/(proposing merger reviews to scrutinize impact on user privacy and encouraging FTC to establish rules on surveillance and accumulation of data). 
4 Amazon’s Antitrust Paradox at 710. 
5 Amy Klobuchar, U.S. Senator for Minnesota, Senator Klobuchar Introduces Sweeping Bill to Promote Competition and Improve Antitrust Enforcement, Feb. 4, 2021, available at https://www.klobuchar.senate.gov/public/index.cfm/2021/2/senator-klobuchar-introduces-sweeping-bill-to-promote-competition-and-improve-antitrust-enforcement

6 See Brown Shoe Co., Inc. v. United States, 370 U.S. 294, 369 (1962) (“Congress appreciated that occasional higher costs and prices might result from the maintenance of fragmented industries and markets. It resolved these competing considerations in favor of decentralization.”).
8 Id
9 Id
10 Id.
11 U.S. Department of Justice, Statement of Acting Assistant Attorney General Richard A. Powers of the Antitrust Division and FTC Chair Lina Khan on Competition Executive Order’s Call to Consider Revisions to Merger Guidelines, July 9, 2021, available at https://www.justice.gov/opa/pr/statement-acting-assistant-attorney-general-richard-powers-antitrust-division-and-ftc-chair.
 12 Amazon’s Antitrust Paradox at 734. 

13 Id. at 721.
14  Id. at 718 (citing Brown Shoe, 370 U.S. at 328-34; United States v. Phila. Nat’l Bank, 374 U.S. 321, 364-65 (1963)). 
16 15 U.S.C. §45.
17 Separate guidance applies to Section 5’s prohibition on “unfair or deceptive acts or practices.” See Fed. Trade Comm’n, Commission Statement of Policy on the Scope of the Consumer Unfairness Jurisdiction, 104 F.T.C. 949, 1070 (1984), available at https://www.ftc.gov/public-statements/1980/12/ftc-policy-statement-unfairness; Fed. Trade Comm’n, Policy Statement on Deception, 103 F.T.C. 110, 174 (1983), available at https://www.ftc.gov/public-statements/1983/10/ftc-policy-statement-deception.

18 Fed. Trade Comm’n, Dissenting Statement of Commissioner Maureen K. Ohlhausen, Aug. 13, 2015.
19 Id. (citing E.I. du Pont de Nemours & Co. v. FTC, 729 F.2d 128, 139 (2d Cir. 1984); Boise Cascade Corp. v. FTC, 637 F.2d 573, 582 (9th Cir. 1980); Official Airline Guides, Inc. v. FTC, 630 F.2d 920, 927 (2d Cir. 1980)).
20 Fed. Trade Comm’n, Dissenting Statement of Commissioner Wilson, July 1 Open Commission Meeting, July 1, 2021, available at https://www.ftc.gov/public-statements/2021/07/dissenting-statement-commissioner-christine-s-wilson.

21 Id
22 Fed. Trade Comm’n, Remarks of Commissioner Philips Regarding Withdrawal of Section 5 Policy Statement, July 1, 2021, available at https://www.ftc.gov/system/files/documents/public_statements/1591578/phillips_remarks_regarding_withdrawal_of_section_5_policy_statement.pdf 
23 FTC Chair Khan has also ordered FTC staff to cancel all public appearances, which had provided the business community with opportunities to gain insights into FTC considerations. See Leah Nylen, Betsy W. Swan, FTC staffers told to back out of public appearances, Politico, July 6, 2021, available at https://www.politico.com/news/2021/07/06/ftc-staffers-public-appearances-498386.
24 Fed. Trade Comm’n, Dissenting Statement of Commissioner Wilson, July 1 Open Commission Meeting, July 1, 2021, available at https://www.ftc.gov/public-statements/2021/07/dissenting-statement-commissioner-christine-s-wilson.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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