On March 9, 2022, President Joe Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets that directs federal officials to consider the effects of “distributed ledger technology,” popularly known as “blockchain” or “crypto,” on a host of important policy areas such as data privacy, financial stability, and even climate change. The Executive Order also mentions competition.
Specifically, the Executive Order:
- Encourages the Department of Justice (“DOJ”), the Federal Trade Commission ( “FTC”), and the Consumer Financial Protection Bureau to “consider what, if any, effects the growth of digital assets could have on competition policy.”
- Identifies “interoperability with digital platforms” and “payment systems” as priorities for digital assets moving forward.
The Executive Order buttresses pre-existing efforts at the DOJ and FTC to study the impact of blockchain technology on competition policy, including a DOJ initiative formally to educate the DOJ’s Antitrust Division staff about blockchain technology, and an FTC Blockchain Working Group formed in 2018. A review of the antitrust implications of cryptocurrencies likely would include a review of the underlying blockchain technology, which FTC staff and the former head of the Antitrust Divison, then-Assistant Attorney General Makan Delrahim, have heralded as a pro-competitive tool to disrupt incumbent digital platforms.
The U.S. antitrust agencies are still developing their approaches to cryptocurrencies and their innovative use cases — their interest is clear but they have not provided any detailed guidance. While enforcement matters involving blockchain remain rare to date, business should be aware of practices involving blockchain technology that could give rise to antitrust risk, including competitor collaborations, sharing sensitive information with competitors on the blockchain, and anticompetitive mergers involving companies offering blockchain-based services.
A Blockchain Antitrust Issues Checklist is available here.
