As we near the end of President Joe Biden’s first year, many outside observers will be taking stock of the administration’s policy achievements or lack thereof. But in one major area, the administration may just be getting started. With the recent confirmation of Jonathan Kanter to lead the Justice Department’s Antitrust Division — an office that may be among the department’s most important in the next few years — the Biden administration now has the people in place to really begin its ambitious effort to reorient federal antitrust policy and enforcement, an effort that could have significant consequences for companies like Facebook, Amazon and Google.
Kanter’s confirmation completes the installation of a much-vaunted trio of officials — including Lina Khan at the Federal Trade Commission and Tim Wu at the White House’s National Economic Council — who are supposed to usher in an era of antitrust reform across the federal government that has been urged by Democratic politicians, progressive think tanks and anti-corporate activists. The idea, put briefly, is to shift antitrust policy and enforcement away from the intellectual framework that has dominated the law for the last 40 years — which focuses largely on the prices that consumers pay — to a broader and more flexible approach that accounts for changes to larger market dynamics, including effects on labor and wages. This would be a daunting enough undertaking on its own, but now that Kanter is firmly at the helm of the Antitrust Division, the enthusiasm for his selection will confront several serious headwinds: organizational, legal and economic.
Organizationally speaking, Kanter is coming into the DOJ without the support of a clear and built-in constituency. His selection came after the longest delay for a nominee to lead the office in modern history, and after a strange series of events that suggested the possibility that he was not the person that Attorney General Merrick Garland wanted to see in the role. That saga began with a story in late January from the American Prospect and the Intercept that reported that Garland was “hoping to install” Susan Davies, a former aide of his who had in a civil lawsuit a decade ago represented Facebook — a mortal sin among the progressive antitrust and anti-corporate set. (At his confirmation hearing the following month, Garland got visibly frustrated when asked about this, calling the report “completely incorrect,” but the American Prospect repeatedly doubled down on its reporting.)
But even if Kanter’s new boss didn’t want him for the job originally, there are more significant concerns about Kanter’s ability to marshal the support and enthusiasm of the line attorneys and staff who work in the division. Kanter has never actually worked in the DOJ before and has no experience managing a large organization that resembles anything like the Antitrust Division and its 700 government employees. His government experience comprises a couple of years working at the Federal Trade Commission in the late 1990s straight out of law school. He spent the last 20 years working at a variety of private law firms in Washington, D.C., where he litigated against Google and represented companies that included Microsoft, Uber, Yelp, and News Corp. — work that is seemingly tolerated by the same people who opposed Davies on the theory that these sorts of companies have been the victims of Big Tech’s sharp-elbowed (and at times arguably illegal) business practices.
As a relative outsider thrust atop a large government organization, Kanter is not that different from Khan, who now oversees more than 1,000 employees at the FTC after a very sparse government career of her own. For months, stories from POLITICO and other major outlets have reported that Khan has struggled to gain the confidence and support of the career staff who actually run the agency. It is not easy to take the helm of a large organization whose career staffers may view you with suspicion (and possibly even disdain), as Khan seems to be learning the hard way and as Kanter may soon learn as well.
Legally speaking, Kanter will also need to deal with outsized expectations from progressives who may be overly optimistic about what can be achieved through more aggressive enforcement in an area of the law that is deeply conservative — ideologically, economically and jurisprudentially. A major issue will center on the department’s approach to one of antitrust law’s most fundamental concepts: the so-called consumer welfare standard — under which regulators and courts try to determine whether a proposed merger or challenged transaction will harm consumers in the form of higher prices, reduced output or diminished quality — and, more broadly, what the goals of antitrust law should be.
In recent years, self-styled antitrust reformers have argued that the current framework, which is generally traced to former Solicitor General Robert Bork, is far too narrow. Khan, for instance, once argued that antitrust law should “protect consumers from anticompetitive overcharges and small producers from anticompetitive underpayments, preserve open markets, and disperse economic and political power.” In July, Biden signed an executive order on competition spearheaded by Wu that took a similarly expansive view — arguing that “excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers.” Despite the generally appealing nature of this sort of language, the effort is in fact deeply controversial among many antitrust legal professionals, who question its coherence and administrability.
Exactly where Kanter stands on these big questions is directionally apparent, but he has so far managed to avoid getting into some crucial specifics. In an FTC roundtable in 2018, he made clear that he was sympathetic to the reformers’ view, but during the confirmation process, he provided written responses to questions from Sen. Chuck Grassley (R-Iowa) on the topic that were far shakier on particulars. In them, Kanter wrote that he had previously “voiced concerns that the application of the consumer welfare standard has been inconsistent, vague, and insufficient to keep pace with market realities” and that “effective antitrust enforcement requires a deep understanding of market realities and facts to determine whether the conduct at issue harms competition and the competitive process.” He proceeded to effectively ignore Grassley’s questions about whether antitrust law should be used either to promote wage equality or to strengthen labor rights.
Kanter would not have been nominated if the administration and his backers were not confident that he shares their goals, but implementing them is another thing entirely. There are very real questions about how to administer a policymaking and enforcement regime using an amorphous combination of economic objectives and political values. What exactly does it mean to “disperse economic and political power” in the context of a hypothetical merger? When looking at a potential transaction, how do you balance the supposed effects of lower prices against wage inequality? These are not questions that will be as easy to dodge in court filings and courtrooms as they are in roundtables and law journals.
Lastly, there is another challenge for Kanter and the putative reformers that they could not have foreseen years ago when they began to formulate and spread their ideas — namely, that they would come to power at an economically awkward moment. Despite the White House’s best efforts, Americans appear to be highly concerned at the moment with inflation, worried about the prices of the actual things that they buy. Depending on how long this period lasts, an antitrust enforcement program that tries to upend the consumer welfare standard and its focus on lowering costs could prove even harder than it would otherwise already be.
Kanter’s ascendance at the DOJ represents the culmination of a long career and the prospect of serious changes. It is a major achievement and was no doubt difficult to attain. Now comes the hard part.
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By: Ankush Khardori
Title: Opinion | Biden’s Big Antitrust Push Isn’t Going to Be Easy
Sourced From: www.politico.com/news/magazine/2021/12/14/antitrust-enforcement-obstacles-kanter-justice-department-524187
Published Date: Tue, 14 Dec 2021 04:30:25 EST
