Washington, D.C. – Over the last two years, Minnesota Democratic Sen. Amy Klobuchar has spent much of her time trying to set the stage for the Federal Trade Commission to break up the companies known collectively as “Big Tech.”
She hasn’t had much luck – even though her proposals increasing the FTC’s regulatory power have the support of some high-profile Republicans like Iowa’s Chuck Grassley, the ranking Republican on the Judiciary Committee and someone who is regarded as a conservative stalwart.
Though they may come at this from different sides, their goals are the same: Empower the FTC to break up companies engaged in behaviors they don’t like, make corporate mergers and acquisitions more difficult, and increase the influence of U.S. government lawyers and bureaucrats in the corporate decision-making process, all in the name of protecting consumers. Where have we heard that before?
The stark reality, as a new report issued by the Committee to Unleash Prosperity reflects, actions politicians and regulators take in the name of “consumer interest” work against them more often than not.
Klobuchar’s approach to the problem, which would abandon the community welfare standard in place for almost six decades, would cause prices and costs to rise, not fall, and discourage the development of alternatives to the market-based technologies that currently constitute what some economists might call a near-natural monopoly.
The report, co-author by committee co-founder and noted economist Arthur Laffer, concludes that changing the legal standards for monopoly and antitrust actions, as Klobuchar has it in mind to do through her various proposals, would stifle innovation, strangle new business startups and seriously retard American competitiveness in the global marketplace.
“Traditional antitrust law presupposes that market power and concentration always leads to higher prices, but in many industries — particularly the technology sector of the economy — dominant players have tended to lower prices for consumers,” Laffer writes. “It should be well accepted that if a company is not acting in a way that is harming consumers, then its dominant position should not be regulated or penalized by the government.”
As a result of the highly questionable antitrust concerns that will take precedence over the recognized standards that now exist, the number of new companies started in the United States will certainly decline. For those that do manage to open for business, the possibility of eventual profitability would be made more remote.
Who benefits from that? Not American consumers or workers, especially those in the low-wage cohort with limited education and work experience. They’ll see the price of goods rise without a corresponding increase in wages as the number of jobs available and being created falls off from what it could be. The biggest beneficiary of Klobuchar’s novel approach to antitrust is adopted, the report says, will be China and other overseas U.S. competitors.
Industry analysts have identified the provision in the Klobuchar bill that would increase the FTC’s budget by nearly $300 million a year as one of its worst. That would enable it to challenge every major merger and acquisition brought before it for approval and impede rather than accelerate growth in the economy. In tough times such as the ones that exist now, it is the deregulatory efforts at the federal level that produce the most bang for the buck.
The focus Klobuchar has placed on these issues has been described as an attempt to burnish her progressive credentials in advance of a 2024 or 2028 run for the Democratic presidential nomination. Antirust law is, after all, the foundation of modern progressivism and an important component of the populist theory that most things that are “big” inevitably turn out to be “bad” as well.
If that’s her intent, she may need to rethink her strategy. Polling data routinely shows inflation — not issues like industry consolidation, mergers and acquisitions and product placement on commercial websites — to be what is topmost in the minds of potential voters. NetChoice, a trade group that promotes free enterprise and free expression on the internet, recently released a survey that showed voters to be “extremely concerned about soaring prices” and blaming President Joe Biden for it.
The survey of almost 10,000 registered voters conducted for NetChoice by Echelon Insights, revealed that 61 percent of those who participated believed the economy is the main issue in the upcoming election Just 2 percent said that regulating the tech industry, as Klobuchar proposes to do, ranked among their top three.
As if that were not enough, 89 percent of respondents said they wanted Congress to focus on bringing inflation down, not breaking the tech industry up into smaller companies. Bringing the issue home, to the kitchen table, nearly two-thirds — 61% — said they would be “less likely” to vote for a politician who supports proposals like Klobuchar’s that eliminate the conveniences associated with shopping online like Amazon Prime’s two-day shipping.
Under the regulatory regime Klobuchar proposes and FTC Chairman Lina Khan would like to have at her disposal, American companies would find themselves looking to Washington before making moves beneficial to the economy as a whole. At the highest levels of corporate decision-making, the requirements involved in obtaining the approval of federal regulators would quickly overtake the need to remain smart and relevant in the commercial arena. Concerns about efficiency, innovation and productivity would be tossed out the C-Suite window so time could be devoted to finding ways to please the politicians.
No matter what Klobuchar can do, and there’s a broad consensus emerging that no action on any of her proposals would be taken before mid-October and possibly not until a “lame duck” session of Congress convenes in late November or December, her ideas are running into major opposition in House.
California Democrat Zoe Lofgren, the chairman of the House Administration Committee and a close ally of Speaker Nancy Pelosi is threatening to oppose efforts to let the full House start voting on its versions of Klobuchar’s legislation unless significant changes are made. The expansion of the marketplace on a global scale and the innovations that have come from that, particularly in the high-tech sector, have dramatically reduced consumer prices while expanding the choice of items available. This, one would think, is to the benefit of consumers and companies. Klobuchar disagrees, failing to recognize — as Laffer correctly asserts — a company that is not harming consumers should nonetheless be punished because it has established a dominant position in a sector of the economy. This is a punitive grab for power by the political class that will lead to companies rushing to the government, not to patent the latest ideas and innovations, but to bring legal action against their competitors. It will stifle growth and empower our global competitors while raising prices and limiting choices here at home. That’s not in the best interests of the American consumer, no matter what Amy Klobuchar or any of the other supporters of her bill might try to explain. It will hurt them.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Rigged for & by Big Tech to WIN, we lose
First step is to rid ourselves of ALL Demonrats, period. Then we can start a course correction for the country.
Whenever I see “bipatrisan” associated with any bill, I know it’s trouble for us citizens. This one stems from a Democrat, Amy Klobuchar, who is a Leftist plainly and simply. The good people in Minnesota can do us all a favor and get her out of office.