[Aggressive antitrust enforcement is starting to notch some
victories.]
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THE WEEK CORPORATE POWER STARTED TO DISSIPATE  
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David Dayen
November 4, 2022
The American Prospect
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_ Aggressive antitrust enforcement is starting to notch some
victories. _

Jonathan Kanter, assistant attorney general for the Antitrust
Division at the Department of Justice, prepares for a Senate Judiciary
Subcommittee hearing on antitrust laws and enforcement, at the Capitol
in Washington, September 20, 2022., Graeme Sloan / SIPA USA via AP
Images

 

There are plenty of theories
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why this is happening. But I think it could be tied to the fact that
we have become culturally conditioned to expect the world to move at
internet speed, while our governing system of checks and balances
moves like an 18th-century carriage when it moves at all. Impatience
has seeped into electoral decision-making—often justifiably, as
chronic gridlock has stymied progress on serious problems for decades.
Even when the system does get around to spitting out the progress we
seek, it is often too late to save the skins of those who produced it.

This is approximately the trajectory of the fight against corporate
power. For nearly two years, the Biden administration worked to
assemble the exact team you would want for an aggressive push against
runaway monopolization. They said the right things and made the right
decisions. The president signed an executive order
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a whole-of-government approach to promoting competition across the
economy. The agencies sued Facebook and Google, and started a phalanx
of investigations.

_MORE FROM DAVID DAYEN
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But things didn’t get immediately better, because antitrust cases
take a long time, and the courts have been generally hostile to them
for 40 years, and the Federal Trade Commission spent several months
with a 2-2 Democratic-Republican split, and probably 19 other factors
I don’t know about. Thus you got sharp observers like Scott Galloway
and Kara Swisher grumbling back in September
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can list [FTC chair Lina Khan’s] accomplishments on zero hands right
now.”

That wasn’t actually true
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But what our instant-gratification society isn’t equipped to handle
is the idea that this sort of persistent effort and preparation, even
if it looks like nothing is happening, is what leads to the
breakthrough. And this week feels like that breakthrough, ironically
coming in the middle of a midterm election climax that will drown it
out.

On Monday, U.S. district court judge Florence Pan blocked the merger
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Penguin Random House and Simon & Schuster, which would have narrowed
the major book publishers from five to four. Significantly, the
Justice Department’s Antitrust Division, led by Jonathan Kanter,
based its argument on the fact that the consolidation would have
reduced advances for authors because they would have fewer companies
bidding on their services. That’s an argument about the impact of a
merger on workers, not consumers, which Robert Bork famously argued
was the only thing antitrust enforcement should concern itself with.
The Justice Department also claimed that cultural output would be
reduced as a result of the merger, another novel (and correct)
application of antitrust law.

If that were the only news of the week, it would signal a sea change:
the first successful merger challenge that went through a full trial
in half a decade. But also on Monday, Kanter announced a guilty plea
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a criminal monopolization case under Section 2 of the Sherman Act, the
first case of its kind in 45 years. Nathan Zito admitted to
monopolizing the niche market of highway crack-sealing services by
offering his chief rival $100,000 to split up the country, with
Zito’s company taking Montana and Wyoming and his competitor taking
South Dakota and Nebraska. Zito faces up to ten years in prison.

Our instant-gratification society isn’t equipped to handle the idea
that this sort of persistent effort and preparation is what leads to
the breakthrough.

Just a couple of days earlier, the DOJ sent out inquiry letters
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private equity firms, asking about partners of those firms who sit on
corporate boards for multiple companies that they own in the same
industry. This is known as interlocking directorates, and the conflict
of interest is obvious: A board member of multiple companies in the
same market could prefer that they don’t compete, and take steps to
ensure they don’t. Last month, similar inquiries caused seven
directors
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corporate boards to resign. Like the DOJ’s other actions,
interlocking directorates are clearly illegal
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section of the law barring the practice was simply forgotten during
the decades of corporate domination of government.

So that was Monday. On Tuesday, the states got into the act, with
Washington state Attorney General Bob Ferguson filing suit
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block a feature of the Albertsons-Kroger merger
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America’s two largest grocery chains. Embedded in the deal was
a special dividend payout
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Albertsons to its private equity owners of $4 billion, which is more
than Albertsons has in cash on hand. Such a large payment would put
Albertsons in dire financial shape, thus enabling the company to say
that Kroger buying it is the only option, while its private equity
looters make off with the cash. California, Illinois, and Washington,
D.C., have sued to block the payout as well.

The same day, Senate Banking Committee chair Sherrod Brown (D-OH)
asked the Federal Trade Commission to investigate RealPage
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antitrust violations. The rental pricing software company gained
notoriety in a ProPublica piece
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how RealPage’s tracking of every rental price paid in a market
operates like a cartel in driving up rents.

So across the Democratic Party—led by but not limited to its
standard-bearer—there is a concerted effort to use antitrust law
(and consumer protection law
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to police the routine rip-offs of the public and the overbearing
nature of concentrated corporate power. And instead of just talk,
there’s accompanying action, and even success.

This is having a real impact in the business world. The implosion of
Mark Zuckerberg’s Meta
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as he sinks the company’s ample fortune into virtual worlds
that nobody seem to like
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is hilarious, but it’s also being driven, at least in part, by a
newfound focus on monopoly. Zuckerberg bought his way to dominance
with Facebook, and it’s clear that’s not an available path
anymore, so he’s pivoting to conquer another world. The FTC
is going after him on that
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too.

In fact, all of Big Tech is seeing a Wall Street exodus
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as anti-competitive behavior is now seen as bad for business. Large
conglomerates are thinking about splitting themselves up
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Yes, mergers are still happening
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and the DOJ and FTC won’t be able to stop them all. But big business
is recalibrating, forced to do so by government.

The administration hasn’t yet been able to stop the biggest
imposition of corporate power of the first two Biden years:
the incessant and continuing markups of prices
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using inflation and supply chain issues as an excuse. But the
president did accuse oil companies
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war profiteering this week, and maybe he’s working his way up
to the kind of actions JFK took
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his presidency, which did even more to back off corporate decisions
that harm the public.

If things go as expected on Tuesday, decent legislative action will be
unlikely, and major policy fights with huge implications will ensue.
But that doesn’t shut the door on this president or his
administration. It means that the kind of executive and agency action
described above becomes all the more important. This is in fact the
function of the executive branch, to execute the laws already passed.
With the right personnel and direction, that can have a powerful
impact, even if it takes some time. Even a president without Congress
can have a successful term in office, and even change the trajectory
of American life to the fullest extent possible. We know that, because
it’s actually happening.

_DAVID DAYEN is the executive editor of The American Prospect. He is
the author of Monopolized: Life in the Age of Corporate Power (2020)
and Chain of Title: How Three Ordinary Americans Uncovered Wall
Street’s Great Foreclosure Fraud (2016), which earned the Studs and
Ida Terkel Prize. He was the winner of the 2021 Hillman Prize for
excellence in magazine journalism._

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* Anti-trust
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* monopoly
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* Federal Trade Commission
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* Publishing Industry
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* Judiciary
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* Sherman Antitrust Act
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* private equity
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* interlocking directorates
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* corporate mergers
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* Consumer Financial Protection Board
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* profiteering
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