Hopefuls aim at corporate giants
Elizabeth Warren slammed Washington for failing to challenge giant corporations. Bernie Sanders assailed the power of Wall Street and the pharmaceutical industry. Cory Booker vowed to appoint more judges and antitrust enforcers and even Joe Biden is preparing a trustbusting plan.
Democratic presidential hopefuls are coming out in force against the rapid pace of corporate consolidation, a message to 2020 voters that gained volume during their first debates in Miami last week. They’re expanding their pledges to take on big tech, including Facebook and Alphabet, to other industries.
Attacking big corporations is both a political message and a policy prescription. It’s one way Democrats think they can address the concerns of voters who have fallen behind, even as the U.S. economy continues to expand. As Democrats gear up to try to take back the White House in 2020, they hope the anticorporate tone taps into the populist passion that propelled Donald Trump in 2016.
“Whoever is elected on the Democratic side would be more aggressive on antitrust than we have seen in decades,” said Jason Furman, a former chairman of President Barack Obama’s Council of Economic Advisers who chairs a U.K. initiative on digital competition.
So far, voters views are mixed, but it’s a message that could take hold as frustration grows with large companies and concerns, including how personal data are being used.
Some of the party’s top candidates are warning of a new robber-baron era, recalling the powerful oil and steel behemoths of the late 19th and early 20th centuries that the first American antitrust laws were designed to tame. Their campaigns often cite studies showing that consolidation may be responsible for higher wealth inequality, slower productivity growth, fewer startups and stagnant wages.
The candidates are putting together plans to target a wide range of industries including agribusiness, telecom and health care. Booker, for example, has offered legislation that places an indefinite moratorium on acquisitions in the food and agriculture sector and Amy Klobuchar sponsored an antitrust overhaul that would require merging companies to prove their consolidation wouldn’t harm competition.
The proposals mark a shift from previous administrations that had a lighter regulatory touch, allowing consolidation in almost every sector of the economy.
More than three-quarters of U.S. industries over the last two decades have seen an increase in concentration, studies show. Markups — how much a company charges for a product above its own costs — have soared, another sign of rising market power. These findings are consistent with research showing a smaller number of firms across the U.S. economy capturing a greater share of sales, giving rise to so-called superstar companies.
Democrats already started questioning this trend after winning the House majority last year. Rep. David Cicilline of Rhode Island, the antitrust subcommittee chairman, is investigating concentration in the tech industry. The U.S., he has said, is in the midst of a “monopoly moment” that stifles competition. One of Cicilline’s questions is why there hasn’t been a “serious antitrust investigation” in 20 years.
At the same time, the Justice Department and Federal Trade Commission have carved up oversight of four tech giants, with the Justice Department taking responsibility for Alphabet’s Google and Apple, while the FTC is investigating Facebook and Amazon.com.
These inquiries could gather steam under a Democratic president, who sets the tone for antitrust enforcement through appointees to the Justice Department and the FTC.
A Democratic White House would also likely deploy broader agency regulatory authority to check the power of companies in many industries.
That includes the Transportation Department on airlines, the Department of Health and Human Services on insurance and pharmaceutical companies, the Federal Communications Commission on telecom providers, and the Agriculture Department on agribusiness giants.