(Drivebycuriosity) - There is a lot ado about antitrust. Amy Klobuchar and other US senators are pushing several bills which would restrain Big Tech and a lot of other businesses. Two mighty authorities, the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ), are suing Amazon, Microsoft, Apple & Google and a lot of other companies based on alleged monopolist practices.
The antitrust crusade gets a lot support from the media, especially New York Times, Washington Post, The New Yorker, NPR & The Atlantic. Left-leaning organizations like the Open Markets Institute and other antitrust activists are fanning an anti-business climate on social media and in the public.
Fundamental Change
The antitrust zealots are known as Neo-Brandeisians (after Supreme Court Justice Louis Brandeis, 1916-1939). They are working on a fundamental change of America´s economic structure and try to expand the role of the government in the U.S. economy significantly.
( pbwt.com dailyjournal promarket reason).
The Neo-Brandeisians represent a Marxist ideology writes FTC-commissioner Christine S. Wilson, who resigns at end of this month (ftc.gov ). They aim for a socialist society, where the means of production is controlled by the state. In such a society planning will substitute for competition as the economy’s steering mechanism. The zealots prefer "that the government, rather than the private sector, orchestrates the functioning of the economy".
The Neo-Brandeisans want to replace the market process of supply
and demand by a continuously regulated environment
where market outcomes are constantly being reviewed by bureaucrats who
don`t understand economics and ignore history (truthonthemarket ).
Antitrust focused in the recent decades on consumer welfare. The antitrust enforcers sought to protect the consumers, for instance against unjustified price hikes. Neo-Brandeisians like FTC chair Lina Khan instead want to abandon consumer welfare and replace it with broader goals. Sandeep Vaheesan, director of the left-leaning Open Markets Institute and a former colleague and co-author of Lina Khan, declared consumer welfare as "nonsense" ( sagepub law.columbia).
Instead of fighting against price hikes Khan & Co. fight against low prices! The antitrust zealots claim that low prices destroy competition, hurt workers and ruin the environment ( vox ).
Political & Social Goals
The zealots want to expand the targets of antitrust policy. They intend to fix issues like underemployment, income disparity, political power, and wealth accumulation (thehill ).
FTC chair Lina Khan argued that antitrust must be reconfigured toward the redistribution of economic and political power and away from concerns regarding price (lpeproject realclearpolicy). FTC commissioner Rebecca Slaughter demands that “antitrust should be used to accomplish political and social goals including racial equitiy” ( thecentersquare crowell). She declared that "antitrust can and should be deployed in the fight against racism" (ftc.gov ).
The antitrust zealots - lead by Khan´s FTC & the DOJ - view large companies as evil and are fighting them with law suits and restrictions. Joe Lonsdale calls the FTC "a radical, intellectually lazy form of anticapitalism based on a view that anything done by big companies must be bad because they're big" ( blog.joelonsdale).
Mighty FTC & DOJ are suing against almost any merger by a big company, even when it reduces costs and creates efficiency gains. Former Biden adviser Tim Wu claims, that efficiencies (caused by large size or created by mergers) are bad. He also sees factors like "productivity, declining costs, and cheapening of commodities" as bad for the society ( reason).
FTC commissioner Alvaro Bedoya wants to punish stores for providing the lowest possible prices to consumers (CarlSzabo ). Bedoya also claims that efficiency is unfair because efficient companies hurt inefficient competitors (ftc.gov ).
Some activists even regard consume as vulgar and bad for the planet ( vox.com).
Ignoring History & Basic Economics
FTC chair Lina Khan seems to be the Jeanne d'Arc of the antitrust zealots. Her fame started 2017 when she - then still a law school student - published an anti-Amazon paper ((yalelawjournal reason ).
She claims that Amazon will become a monopoly because Amazon`s prices are "too low" (!) which will drive competitors out of business and will hinder potential competitors to emerge. Her accusations are based on foul premises, ignoring history and basic economics ( itif.org).
The Khan ignores Walmart`s fast growing online business, the rise of e-commerce platforms like Overstock, Shopify, Wayfair, Etsy & Ebay and the advance of myriads of other online shops - and the growing importance of foreign competitors like Alibaba, Mercado Libre & Rakuten.
The Khan also claims that Amazon - after becoming a monopolist - could hike prices again. She neglects that Amazon`s alleged monopolistic profits would attract new competitors which would destroy the monopoly.
Nevertheless, in 2021 President Biden announced Khan, who had worked interimly in left-leaning organizations, chair of the FTC, blindsiding the Congress (inside ).
Communist Manifest
Since taking the command of the FTC the Khan has swiftly consolidated her power and undermined the Congressionally-mandated Commission structure. She is abusing her powerful position "to make new law, invent bizarre market definitions and limitations, and expand the reach of any government agency" (inc.com twitter).
With her command-and-control style approach the Khan fundamentally changed the FTC and how America approaches competition & industrial policy (truthonthemarket twitter). The Khan claims that she has the "Rule Making Authority" and that she can decide what is & isn't "unfair competitive conduct" ( ftc.gov twitter uschamber ).
Khan`s 5-years plan (released 2022) reads like a Communist Manifest (ftc.gov ). It includes support equity for historically underserved communities, which include Black Americans, Latinos, members of religious minorities, lesbian, gay, bisexual, and persons adversely affected by persistent poverty or inequality. Apparently Khan`s antitrust focuses on race and income inequality, following Karin Slaugther`s ideas who promotes that antitrust is about equality (crowell ).
The Khan uses her powerful position for a crusade against business, especially against Big Tech. According to her "tech companies have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons." (npr ) What about the intense competition between Meta, Apple, Microsoft & Google? Each of them tries to win over the customers of the competitors.
The Khan claimed publicly, that Amazon is "guilty of antitrust violations and should be broken up." (yalejreg.com wsj.com). Khan`s FTC is now working on a half dozens of complaints and law suits against the company (politico ).
The Khan also started a feud against Meta, the mother of Facebook, stupidly claiming that Facebook is a monopoly (bbc ). This accusation is as ill fetched as the Amazon monopoly claim. Meta`s stock market capitalization shrank temporarily more than 70% because the corporation is losing users to up-and-coming competitors like TikTok & Snapchat.
Facebook & Instagram are financed
by advertisements and are therefore competing against other media corporations like Twitter, Google, News Corp, Apple, Paramount etc.
The FTC sued Meta, Microsoft, Altria, Illumina and other companies for alleged monopolistic practices. The Khan lost most of her law suits so far because courts disagree with Khan`s radicalism, but she doesn`t care, the suits cost tax payer`s money, not hers.
Exodus AT The FTC
Since Twitter is owned by Elon Musk the FTC is orchestrating an aggressive campaign against Twitter because the entrepreneur is not popular with the Democrats and the Biden Administration. "The agency sent more than a dozen letters to Twitter in a span of 10 weeks that contained more than 350 specific demands, thus creating a "substantial burden on the company's operations." ( npr.org).
Khan´s radical course lead already to an exodus at the FTC. 99 senior-level career attorneys left the agency between 2021 and 2022 ( bloomberg). The Khan has begun to replace them with radicals from left-leaning organizations, accelerating so the left-shift of the authority.
Kafkaesque System
If the zealots get their will the US economy will be ruled by unelected bureaucrats who are economic illiterate and ignorant of history - a system which reminds of Kafka`s novel "The Castle" ("Das Schloss") where anonymous mighty bureaucrats make the decisions.
The antitrust zealots are aiming for a dictatorship of bureaucrats, which would punish merits, diligence, risk taking etc (they are calling merits "unfair").
The radicalization of Khan`s FTC is a step to central planning and would lead to a waste of resources what we could learn from the breakdown of Soviet era central planning systems & the decline of Cuba, Venezuela & North Korea. Central planning is dysfunctional - it never functioned in history.
The antitrust zealots started a war on business. Their crusade is throwing sand into the gears of the US economy, slowing economic growth, handicapping the US in the competition with China and reducing the living standard of everybody by hiking prices and diminishing services.
