Bringing Back Trust-Busting

This will be far, far down the list of Google searches involving Hillary Clinton today, but it’s important to note that she is showing signs of understanding one of the biggest policy challenges of our era: the renewed threat of corporate monopoly power created by industry consolidations. In a column at Quartz that appeared late Tuesday, she made it reasonably clear that vigorous enforcement of antitrust laws and policies will be a priority for her administration if she becomes president:

Some pharmaceutical companies recently have raised the price of medications that have been in use for decades by up to 5,000% overnight—gouging patients on drugs that should be getting cheaper over time, not more expensive. The three largest health insurance companies now control 80% of the market in 37 states.

Over the past year, oil prices have fallen from over $100 a barrel to under $50, and the price of jet fuel has dropped more than a dollar per gallon. But the four major airlines—down from 10 airlines just 15 years ago—are charging as much as ever for tickets, even as they hit travelers with extra fees, for everything from checking a suitcase to picking a seat when they fly home at the holidays….

Economists, including President Obama’s Council of Economic Advisers, have put their finger on what’s going on: large corporations are concentrating control over markets. Two-thirds of public corporations operated in more concentrated markets in 2013 than in 1996, according to recent reporting by the Wall Street Journal. Rather than offering better products for lower prices, they are using their power to raise prices, limit choices for consumers, lower wages for workers, and hold back competition from startups and small businesses.

As president, I will take on this fight.

First, I will take steps to stop corporate concentration in any industry where it’s unfairly limiting competition. For example, right now, it’s perfectly legal for a pharmaceutical company to pay a competitor to keep a generic drug off the market. These so-called “pay for delay” agreements keep prescription drug costs artificially high and diminish patient choice. I will empower the Department of Justice to vigorously investigate proposed health insurance mergers and take action to rein in prescription drug and out-of-pocket costs.

Closing these loopholes and protecting other standards of free and fair competition—like enforcing strong net neutrality rules and preempting state laws that unfairly protect incumbent businesses—will keep more money in consumers’ wallets, enable startups to challenge the status quo, and allow small businesses to thrive.

Second, I will prevent concentration in the first place by beefing up the antitrust enforcement arms of the Department of Justice and the Federal Trade Commission. I will direct more resources to hire aggressive regulators who will conduct in-depth industry research to better understand the link between market consolidation and stagnating incomes. Ultimately, this will foster a change in corporate culture that restores competition to the marketplace.

It is especially promising that Clinton is looking at the health care industry as a target for antitrust actions. As Phil Longman and Paul Hewitt persuasively argued here at Washington Monthly, the consolidation of health care providers–especially hospitals–threatens all the accomplishments associated with the Affordable Care Act. More broadly, the antitrust laws offer an market-friendly avenue for what Clinton in the first Democratic presidential debate aptly called “saving capitalism from itself.”

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.