In the early summer of 2023, a consensus about President Joe Biden’s revival of antitrust enforcement took hold in the media: It had flopped. After the Federal Trade Commission, led by Lina Khan, failed in its attempts to stop two high-profile mergers—Meta’s acquisition of the virtual reality firm Within and Microsoft’s acquisition of the video game company Activision Blizzard—the obituaries poured in. “Joe Biden’s trustbusters have fallen short of their ambitions,” The Economist declared. “The defeats raise questions about Ms. Khan’s ability to carry out her ambitious goal of reversing decades of weak antitrust enforcement, as political pressure mounts and patience wanes,” The New York Times wrote. The Wall Street Journal has published an attack on Khan approximately once every 11 days.
But if the boos from the peanut gallery fazed the Biden administration’s trustbusters, they haven’t shown it. In September, the Department of Justice went to trial against Google over its deals with smartphone companies to crowd out search engine competitors; another suit against Google, over its dominance of online advertising, is set to begin next spring. Later in September, Khan announced a major lawsuit against Amazon, charging the behemoth with engaging in “unfair methods of competition” such as forbidding merchants on its sites from offering lower prices on other sites.
The audacity of the suit, and Khan’s abiding criticism of the company’s behavior—she wrote a now-famous treatise on Amazon’s stranglehold on the American economy as a law student in 2017—won her praise from some knowledgeable observers. “By sheer force of intellect,” wrote the New York Times tech reporter David Streitfeld, who has covered Amazon for decades, “she is opening up a conversation about how companies are allowed to behave.” But other media outlets covered the cases in the style of political campaign reporting, in which momentary wins and losses are treated as immensely important. “The spate of high-profile losses has amped up pressure on the FTC to bring a successful case against Amazon,” Politico speculated, as if recent “pressure” is what’s driving a case that Khan has been plotting for years.
Hot takes like these reflect a spoon-fed PR narrative from the tech platforms in the government’s cross hairs. But a quick perusal of history books, or even a glance at Wikipedia, should dispel the notion that a few adverse rulings mean curtains for the revival of antitrust enforcement. The first efforts to check corporate “trusts” in the 1890s also faced major reversals in court, but in little more than a decade the federal government had broken up some of that era’s biggest monopolies, including Standard Oil. And over the subsequent decades, Washington would put together a robust regulatory regime that maintained a competitive economy that would last until the 1980s, when it was dismantled by the Reagan administration.
Yet even on the myopic terms of debate set by the media, the story that Biden’s revival of anti-monopoly policy is failing is not supported by the facts. “That’s a complete bullshit narrative,” Matt Stoller, the author of Goliath: The 100-Year War Between Monopoly Power and Democracy, told me. “They’ve actually been really successful at deterring mergers, winning cases, and changing some aspects of the law.” Biden’s team has had a slew of important victories in court. They include a landmark win against the merger of Simon & Schuster and Penguin Random House and a series of proposed mergers in health care, energy, and tech that were abandoned under the threat of litigation. This has had a demonstrable deterrence effect: So far in 2023, the total value of successful mergers is down 40 percent compared to the averages over the past five years.
But more than just litigating antitrust cases, Biden’s administration has reoriented the entire government toward making the economy fairer and more competitive. Biden’s policy program is designed to check monopoly and restructure competition in labor and other markets to public purposes. His administration has made stamping out anti-
worker and anti-consumer practices in the business world a government-wide imperative, directing agencies to use their full regulatory powers and issue new rules. Results include a crackdown on junk fees, a breakup of the private hearing aid cartel, and new regulations on broadband and rail companies, to name a few early victories.
While the media and many political commentators remain largely obtuse to the larger vision behind these changes, Biden has been explicit about how competition policy unites his administration’s directives across areas that have long been treated as distinct policy silos, including trade, national security, antitrust, labor law, industrial policy, and public investment in infrastructure, as Rana Foroohar explains elsewhere in this issue (see “The Great Reordering”). And while Biden’s revival of antitrust enforcement and competition policy is a sharp break with the past few decades, there’s reason to think it will endure for years to come, regardless of what happens next November.
Biden’s vision is deeply informed by the largely forgotten history of how America once used a broad range of public policies and institutions to contain corporate monopolies and channel competition to productive, equitable ends. This history includes the 1887 Interstate Commerce Act and subsequent amendments, which tamed the power of railroad barons and ensured that different shippers, towns, cities, and regions enjoyed equal access to the dominant networked industry of the era. It includes the Sherman Act of 1890 and subsequent amendments that would eventually come to contain the monopoly power of trusts controlled by colluding Wall Street banks and financiers like Jay Gould and J. P. Morgan. It included Progressive Era institutions like the Federal Trade Commission, armed with the statutory power to police unfair business practices and combinations wherever they occur. And it included state and federal laws like the Robinson-Patman Act of 1936 that restricted giant retailers like Woolworth’s and the A&P grocery chain from abusing their market power over suppliers and customers.
By the 1950s and ’60s, this broad competition policy regime had led to market structures that were well balanced compared to today and consistent with both innovation and the growth of a broad middle class. In sectors of the economy like chemicals or auto manufacturing, where there were large economies of scale and deep capital needs, giant corporations like DuPont or General Motors were allowed, but they were bound by labor laws that effectively forced them to share their profits with their workers, and by codes of corporate governance that made them responsible to stakeholders beyond just their stockholders. In other realms, corporate concentration was allowed only to the point that it was necessary to accommodate progress. Farms got bigger and more mechanized, and so did food processors, but they were not allowed to become concentrated agribusinesses like today’s industrial-scale confined animal feeding operations, monopolized meat-packers, or international fertilizer and “biotech” cartels. Modern supermarkets replaced many local butchers or bakers, but chain stores were prohibited from approaching anything like the market dominance of today’s Walmart, let alone Amazon, and in most American towns and cities, Main Street merchants still had a chance.
All this changed during and after the 1980s. Ronald Reagan effectively ended antitrust enforcement, except in cases of proven collusion and egregious monopoly pricing. Restraint on price discrimination by retailers also went by the wayside. This set off a merger and acquisition boom that, when combined with broad deregulation of financial institutions, gave Wall Street financiers increasing dominance over the whole economy and led to the loss of millions of middle-class jobs. Meanwhile, free trade policies and lax antitrust enforcement embraced by both Republican and Democratic administrations eroded much of the country’s industrial production and led to dangerous dependencies on foreign-made computer chips, pharmaceuticals, and key minerals.
Most of this sea change in policy occurred not by repealing the laws that had long channeled and balanced market competition in America, but by policy makers in both parties just failing to enforce them. The result was the growth of corporations of unprecedented size and power in every sector—from media and communications to retail, banking, health care, energy, and food production—that hollowed out local communities and vastly increased racial, regional, generational, and other forms of inequality.
A glance at Wikipedia should dispel the notion that a few adverse rulings mean curtains for the revival of antitrust enforcement. The first efforts to check corporate “trusts” in the 1890s also faced court reversals, but in little more than a decade the federal government had broken up Standard Oil.
For years, the connection between these baleful economic trends and growing market concentration went largely unrecognized by leading policy makers and economists. But beginning in the mid-2000s and increasingly in the early 2010s, writers and thinkers such as Barry Lynn, Phillip Longman, and Lina Khan (who worked together at the think tank New America) began making these causal links in a series of major exposés, mostly in the Washington Monthly and Harper’s. The national press and established politicians in both parties were slow to take note. Even those who faulted the American economy on other grounds typically still believed that it was marked by entrepreneurial dynamism and robust competition.
After the Great Recession, the rise of the Tea Party on the right and Occupy Wall Street on the left revealed the country’s disillusionment with the deeply unequal and precarious economy that consolidation had created. Further evidence came in 2015, with the ascendant presidential candidacies of Donald Trump and Bernie Sanders, who channeled the country’s fury at big banks and billionaires. None of this populist activity focused much on monopoly power, but its effect was to finally make some leaders in Washington start listening to antitrust reformers. In early 2016, Senator Elizabeth Warren met with Lynn, Khan, Jonathan Kanter, another strong anti-monopoly advocate, and Ted Downey, the executive editor of The Capitol Forum, which reports on antitrust issues. A few months later, Warren delivered a speech in which she warned that “concentration threatens our markets, threatens our economy, and threatens our democracy.” That fall, Hillary Clinton gave a speech on the need for greater antitrust enforcement, the first major presidential candidate to do so in decades.
It was a breakthrough moment for the Democrats. During Trump’s term in office, lawmakers like Warren, Sanders, and Amy Klobuchar began talking regularly about the dangers of monopolies. In June 2019, the House Judiciary antitrust subcommittee opened an investigation led by Democrat David Cicilline into Amazon, Apple, Facebook, and Google, and Cicilline recruited Khan as counsel for the committee. Summoning the CEOs of those companies for testimony, Cicilline framed them as modern-day robber barons. The investigation, he said, “goes to the heart of whether we as a people govern ourselves, or whether we let ourselves be governed by private monopolies.” Ahead of the 2020 elections, regulating Big Tech became a major issue in the Democratic primary.
For decades, Biden went along with his party’s general retreat from antitrust enforcement and tolerance of growing corporate concentration. But by 2020, his party’s neoliberal consensus was cracking under the country’s obvious disaffection with the economic status quo. When he won the nomination, he spoke of the need for deep structural change—“an FDR-sized presidency,” as he put it.
Under the guidance of senior advisers Ron Klain and Bruce Reed, he appointed Tim Wu, a Columbia Law School professor and the author of The Curse of Bigness: Antitrust in the New Gilded Age, to a newly created White House economic advisory position. Wu helped impress on him the importance of antitrust enforcement. “The president really liked the idea of basically doing what FDR had done,” Wu told me. “What did FDR do? What FDR did was reinvigorate antitrust.”
Biden chose Khan to lead the FTC, at 32 the youngest chair in its history, and Kanter to head the antitrust division of the DOJ. Both are members of the “New Brandeis” school of antitrust theory, which, in the tradition of the Progressive Era jurist and reformer Louis Brandeis, holds that consolidation threatens the economic and social conditions of democracy and which advocates for the full use of the antitrust regulatory powers of the government.
Wu, Klain, and Reed, together with other senior staffers like the economic adviser Brian Deese, National Security Adviser Jake Sullivan, and U.S. Trade Representative Katherine Tai—some veterans of the Clinton and Obama administrations, others newcomers—devised a policy agenda that exchanged the free market austerity of Reaganomics for new regulations and investments in climate and infrastructure. The group shared an expansive view of competition policy that went beyond antitrust enforcement to include “every law and policy that promotes the distribution of power, of opportunity, of risk,” as Lynn told me. The Biden staff’s conceptual embrace of competition policy, he said, “is far better than anything we could have ever imagined.”
After years of fruitless advocacy, Wu told me, “all of a sudden, things start to move very quickly” with Biden’s senior staff in place. While Congress began to move fitfully on new antitrust legislation, Biden used his own authority to reorient the federal agencies toward protecting workers and promoting competition as it did in the New Deal era, with a “whole-of-government” executive order, issued on July 9, 2021, that was principally authored by Wu. The order called on 17 different government agencies to take a laundry list of actions to address “some of the most pressing competition problems” in the economy. “Capitalism without competition isn’t capitalism; it’s exploitation,” Biden declared in his announcement. “Over time, we’ve lost the fundamental American idea that true capitalism depends on fair and open competition.”
More than two years later, here’s what Biden’s anti-monopoly push has accomplished.
The most important dimension of Biden’s whole-of-government antitrust agenda is an aggressive approach to litigating cases. Last October, the DOJ secured the most important antitrust victory of the Biden era when it successfully blocked the merger of Simon & Schuster and Penguin Random House, which would have cut the number of major publishers in the U.S. from five to four. The “theory of harm” prosecutors presented was novel for the modern era. The DOJ did not allege harm to consumers—i.e., rely on the “consumer welfare” standard—and instead focused their arguments on how authors suffer from consolidation in publishing. By winning the case on this basis, the government set an important new precedent for future litigation: Antitrust cases can be argued on and won by proving harms to independent contractors and businesses, like Uber drivers and merchants selling on Amazon. Another key victory came in May 2023, when the DOJ successfully sued to stop an anticompetitive regional partnership between JetBlue and American Airlines. “I think we can call airline consolidation dead for the moment,” Matt Stoller wrote in his Substack, BIG. Kanter also has pending investigations into Visa, Ticketmaster, and Apple.
And it’s not just merger cases. The agency announced its intention to more aggressively enforce the Clayton Act’s prohibition on directors serving simultaneously on the boards of competitors, leading to the resignation of board directors in several industries. “The DOJ making this a priority is a big step and consistent with the broader theme of reviving dormant legal powers,” Sandeep Vaheesan of the Open Markets Institute (OMI) said. During Obama’s first term, the USDA unsuccessfully tried to challenge the poultry industry’s abusive “tournament system,” which pits chicken farmers against each other to compete for bids and undercuts their bargaining power. But last summer, a DOJ lawsuit against the food production conglomerate Cargill, several competitors, and a data consulting firm alleging years of collusion and wage suppression ended in an $85 million settlement, effectively ending the practice across much of the industry.
Kanter has also initiated a half-dozen criminal investigations against no-poach and wage-fixing agreements, which illegally block workers from changing jobs in their industry. In October 2022, the DOJ won the first-ever conviction under antitrust law for employer collusion when the staffing firm VDA pleaded guilty to a conspiracy with another firm to refrain from recruiting or hiring each other’s nurses. Several other cases have ended in acquittals, but as with lawsuits against mergers, the message is being heard in the business world: Antitrust enforcers are taking labor violations seriously again.
More than just litigating antitrust cases, Biden’s administration has reoriented the entire government toward making the economy fairer and more competitive. Biden’s policy program is designed to check monopoly and restructure competition in labor and other markets to public purposes.
The FTC likewise has filed far more ambitious antitrust lawsuits than it did under previous administrations. Khan has said that to win, the government must be willing to lose, eschewing the extreme caution of her predecessors. But there’s been less losing than media coverage would lead you to believe. Khan’s two oft-referenced defeats in court—the failed lawsuits against Microsoft’s acquisition of Activision and Meta’s acquisition of Within—are in fact the FTC’s only clear losses. The agency has secured important wins in court, including a recent ruling against Intuit for falsely advertising its signature product, TurboTax, as free. The FTC has also extracted settlements that prevent abusive business practices, such as one with the health information technology company Surescripts that prohibits the firm from excluding competitors from e-prescribing markets. And many cases have concluded in companies dropping a merger after being sued by the FTC. Under the threat of litigation, the computer chip maker Nvidia called off its $40 billion acquisition of the chip design firm Arm; Lockheed Martin dropped its $4.4 billion purchase of the engine maker Aerojet Rocketdyne; and Berkshire Hathaway called off its $1.7 billion purchase of a pipeline in Utah, to name a few.
The credible threat of prosecution has proven to have a deterrence effect on mergers and acquisitions across the economy. Though other factors may be at work as well in driving down mergers, merger filings fell by roughly 40 percent in the year after Biden put his new competition policy team in place. In 2023, the total value of successful mergers is also down 40 percent. The business world is feeling the heat: In recent months, the supermarkets Kroger and Albertsons have sold more than 400 stores to try to avoid a merger challenge.
What’s more, antitrust advocates hailed the unsuccessful challenge to Meta’s purchase of Within as a sneaky victory for changing case law. The FTC argued that a monopolist’s acquisition of a nascent company in the market, rather than a mature competitor, can violate antitrust law. The FTC also maintained that a company like Meta can even hurt competition in an industry, like VR fitness apps, in which it’s not yet operating. In his decision, the judge affirmed both of the FTC’s arguments as valid in principle—the first time a court has accepted such arguments since the 1980s. This, like the Penguin Random House case, sets a precedent for future litigation.
The credible threat of prosecution has proven to have a deterrence effect on mergers and acquisitions across the economy. In 2023, the total value of successful mergers is down 40 percent. The business world is feeling the heat.
Reestablishing a broader interpretation of antitrust this way is an essential part of Khan and Kanter’s strategy. “One of the challenges that we face is that antitrust law has, in certain areas, calcified because cases haven’t been brought in new contexts,” Khan told me. Pursuing only classic “rivals buying rivals” cases would do little to expand what’s possible through litigation in an increasingly complex economy, where anticompetitive behavior can take many forms.
Breaking the judiciary’s narrow reliance on the consumer welfare standard will be especially important for tech regulation. Effects on consumer prices alone are a poor measure of the monopoly power of companies like Google and Facebook, which offer free products to consumers even as they charge monopolistic prices to the businesses that rely on their platforms. Case in point: In its lawsuit against Google’s dominance over online advertising—the heart of Google’s business—the DOJ alleges that the company’s anti-competitive behavior lowers ad revenues for websites and publishers and hikes ad costs for marketers. And in its lawsuit against Amazon, the FTC points specifically to the goliath’s monopolistic abuse of online stores doing business on its platform.
This past July, the DOJ and the FTC published draft guidelines that laid out the more expansive standards by which they’re prosecuting anticompetitive behavior. The merger guidelines are a sort of open letter to judges, and while they have no power to compel judges to rule a certain way, courts have given guidelines significant deference across every presidency they’ve been issued. As major cases loom, it may help prosecutors turn the tide.
Lawsuits by the FTC and the DOJ are only the most high-profile weapon in the Biden administration’s war against concentrated economic power. Less prominent but equally potent are the writing and enforcement of regulations based on statutory powers previous administrations have neglected. For instance, when Trump took office, enforcement actions by the Consumer Financial Protection Bureau fell by 75 percent, but it has been revitalized by the Biden appointee Rohit Chopra. The CFPB has gone after companies for price gouging in captive markets like prison financial services, is working on rules that would make it easier for consumers to change banks, and is cracking down on “junk fees”—deceptive charges for service—in banking, part of an administration-wide fight against such fees.
New pro-competition, pro-consumer rules are popping up across the government. The Food and Drug Administration passed a rule to foster greater competition within the hearing aid industry, which is dominated by four companies that together control 85 percent of U.S. sales. With a new Democratic majority, the Federal Communications Commission is preparing to reinstate net neutrality rules to stop broadband providers like AT&T, Comcast, and Verizon from speeding up connection rates to favored websites and slowing service to others. And the Surface Transportation Board is developing rules that will inject more competition into railroading, one of the most consolidated industries in America, by giving shippers currently served by only one railroad greater options for routing their freight on other lines.
The most important rule changes have been at the FTC. Under Section 5 of the Federal Trade Commission Act, the agency has broad authority to make new rules to stop “unfair methods of competition,” but previous administrations failed to use that power. That’s changed under Biden. In January, the FTC proposed a ban on noncompete agreements, which rob more than a quarter of private-sector workers of the basic right to freely switch jobs within the same industry. Under this same authority, the agency is developing rules to crack down on personal data collection and has voted to boost “right to repair” enforcement, prompting Microsoft and Apple to change their rules to allow consumers to repair their own electronic equipment.
Is an earth-shattering win against a tech giant possible in the near term? It’s hard to say. But if major breakups like that of Standard Oil in 1911 are what antitrust is best known for, enforcement in the New Deal era was built on the humbler work of reaching favorable settlements and deterring mergers through the threat of litigation. Bringing corporate power to heel has always been achieved through “1,000 nibbles,” as Barry Lynn told The American Prospect. The Google search case the FTC is currently litigating, for example, is simply “one of those nibbles,” he said.
In 1964, the historian Richard Hofstadter famously observed that “the antitrust enterprise, as an institutional reality, now runs its quiet course without much public attention.” In other words, as enforcement became routinized, the specter of litigation was enough to keep corporations in line. In the 1960s and ’70s, about 70 percent of antitrust lawsuits concluded in a court-ordered settlement.
Such agreements were the backbone of midcentury antitrust enforcement. As Lynn wrote in the Monthly, Thurman Arnold, the architect of America’s 20th-century antitrust regime, established the “government’s general approach” to enforcement, which “was to start by bringing an antitrust suit against a firm that had captured undue control of some sector of the economy. It would then accept a settlement (in the form of a consent decree)” and extract meaningful concessions, such as requiring the company to share patents with competitors for free.
The history of antitrust is only in small part the history of winning big cases. “People think antitrust is very effective when the government is bringing and winning big cases, and my view of that is it’s wrong,” OMI’s Vaheesan said. “When agencies are bringing cases, they’re also deterring a lot of bad conduct from being pursued in the first place, certain mergers aren’t proposed, and certain competitive practices aren’t being used. I think those are the defining features of the successful postwar antitrust system.”
This deterrence effect has important implications for the cases against Google, Amazon, and others that Biden has brought, even if his administration isn’t around to see them through. In 1998, the Clinton administration sued Microsoft over its attempts to monopolize the web browser market, the last major antitrust action against a tech giant before the Biden era. A court ordered the company to be split in two, but the George W. Bush administration reversed the order when he assumed office. Still, the company was chastened enough to allow competitors—including Google—to emerge and thrive in Silicon Valley. Even if a future administration lets Biden’s major cases fizzle, this wave of lawsuits will likely induce lingering caution.
There’s reason to hope that the revival of anti-monopoly policy will not end after Biden leaves office, even if he’s replaced by a Republican. After all, the Trump administration also made some halting moves toward restoring antitrust enforcement.
But there’s reason to hope that the revival of anti-monopoly policy will not end after Biden leaves office, even if he’s replaced by a Republican. After all, the Trump administration also made some halting moves toward restoring antitrust enforcement, most notably bringing the Google search suit in the waning months of his presidency before Biden’s team took the case over. Republican Senator Josh Hawley, who voted for Lina Khan’s confirmation in 2021, recently introduced legislation to break up meat-packing and poultry monopolies. In the September Republican debate, Ron DeSantis called Meta and Google “monopolies.” The writing is on the wall: Slamming corporate power is good politics. “There are such things as ideological and intellectual trends,” Wu told me. “A return to antitrust is one of them.”
That’s not to say that this new antitrust trend is fated to triumph. The sway of corporate power in both parties remains formidable. The federal bench is rife with judges who’ve spent their careers waving through mergers and who can be counted on to be skeptical of cases brought by federal trustbusters. It’s foolish to discount the difficulty of bringing to heel the most powerful corporations the world has ever known.
But it’s even more foolish to write off the antitrust efforts of the Biden administration after a couple of court losses, as the press has been doing. The truth is that the fight for a fair economy isn’t failing. It’s just getting started.
