Executive Order on Promoting Competition in the American Economy Includes Recommendations Urging FCC to Reinstate Open Internet Rules

Posted by CommLaw | Jul 14, 2021 | 0 Comments

President Biden on July 9, 2021 issued an Executive Order establishing a “whole-of-government” framework to coordinate Federal government efforts to address overconcentration, monopolization, and unfair competition affecting the U.S. economy.

Policies. The Order finds that industry consolidation has weakened competition, “denying Americans the benefits of an open economy and widening racial, income, and wealth inequality,” with Federal government inaction contributing to these problems. The Order further finds that the U.S. faces unfair competitive pressures from foreign monopolies and firms that are state-owned or state-sponsored, or whose market power is directly supported by foreign governments.

Administration policies intended to address these issues under its “whole-of-government approach” include:

  • Enforcing antitrust laws to combat excessive industry concentration, abuses of market power, and harmful effects of monopoly and monopsony, especially as these issues arise in Internet platform industries and labor markets, agricultural markets, healthcare markets, repair markets, and U.S. markets directly affected by foreign cartel activity.
  • Enforcing antitrust laws to meet challenges posed by new industries and technologies, including dominant Internet platforms – in particular, challenges arising from serial mergers, acquisition of nascent competitors, aggregation of data, unfair competition using “free” products, surveillance of users, and the presence of network effects.
  • Exercising Federalauthority to challenge transactions “whose previous consummation was in violation of Federal antitrust statutes.”
  • Addressing foreign monopolies and cartels not by tolerating domestic monopolization, but by promoting competition and innovation by businesses of all sizes.

Legal Authority. The Order finds the whole-of-government approach is supported by existing antitrust laws and other statutory mandates, and instructs agencies to further Administration policies by exercising their existing authority to adopt pro‑competitive regulations; to rescind regulations that create unnecessary barriers to entry; to police unfair, deceptive, and abusive practices; to resist consolidation and promote competition within industries through independent oversight of mergers, acquisitions, and joint ventures; to promulgate rules that promote competition, including the market entry of new competitors; and to promote market transparency through compelled disclosure of information.

White House Competition Council. The Order establishes a White House Competition Council within the Executive Office of the President, charged with coordinating and advancing Federal government efforts to address overconcentration, monopolization, and unfair competition affecting the U.S. economy. In particular, the Council will work with Federal agencies to coordinate efforts to implement the actions identified in the Order; to develop procedures and best practices for agency cooperation and coordination on matters of overlapping jurisdiction; and to identify and advance additional administrative actions and potential legislative changes to further Administration policies.

The Council will be chaired by the Assistant to the President for Economic Policy and Director of the National Economic Council, with members from the U.S. Attorney General's office, the Departments of Agriculture, Commerce, Defense, Health and Human Services, Labor, Transportation, and Treasury, and the Office of Information and Regulatory Affairs. The Chair also is required to invite the participation of the FCC, FTC, and certain other Federal agencies, and may invite other agencies and offices.

Agency Cooperation. The Order finds that existing laws have created overlapping agency jurisdiction over mergers and anticompetitive conduct and expresses the Administration's policy that agencies having overlapping jurisdiction “should endeavor to cooperate fully in the exercise of their oversight authority, to benefit from the respective expertise of the agencies and to improve Government efficiency.” Agencies with overlapping jurisdiction are encouraged to coordinate efforts to investigate potentially harmful conduct, to oversee proposed mergers, acquisitions, and joint ventures, and to design, execute, and oversee remedies.

Specific Agency Responsibilities. The Order includes no direct mandate for agency actions, instead recommending that agencies consider using their existing authority to implement the policies set forth in the Order. Specific directives include:

  • The Attorney General, the FTC Chair, and the heads of other agencies with authority to enforce the Clayton Act are encouraged to enforce the antitrust laws fairly and vigorously.
  • To address consolidation in markets across the economy, the Attorney General and the FTC Chair are encouraged to review the horizontal and vertical merger guidelines and consider whether to revise those guidelines.
  • The Attorney General and the Secretary of Commerce are encouraged to consider whether to revise their position on the intersection of the intellectual property and antitrust laws.
  • The FTC Chair is encouraged to consider working with the rest of the FTC to exercise its rulemaking authority to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.
  • Regarding Internet platforms, the Order finds that the U.S. information technology sector is dominated by a small number of platforms that use their power to exclude market entrants, extract monopoly profits, and gather intimate personal information that they can exploit for their own advantage. The Order encourages the FTC Chair to consider working with the rest of the FTC to exercise its rulemaking authority to address unfair data collection and surveillance practices; anticompetitive restrictions on third-party repair or self-repair of items; unfair competition in major Internet marketplaces; unfair occupational licensing restrictions; and other industry-specific practices that substantially inhibit competition.
  • Regarding communications, the Order finds that Americans pay too much for broadband, cable television, and other communications services, in part because of a lack of adequate competition. To promote competition and lower prices, the Order encourages the FCC Chair “to work with the rest of the Commission, as appropriate and consistent with applicable law,” to consider:
    • adopting “Net Neutrality” rules similar to those adopted in 2015 under the Obama Administration, and subsequently eliminated under the Trump Administration;
    • requiring broadband service providers to display a broadband consumer label similar to that adopted by the FCC in 2016, to give consumers clear and accurate information regarding provider prices and fees, performance, and network practices;
    • conducting future spectrum auctions under rules designed to help avoid excessive concentration of spectrum license holdings in the U.S., so as to prevent spectrum stockpiling, warehousing of spectrum by licensees, or the creation of barriers to entry (a policy already embodied in the Communications Act of 1934, as amended);
    • improving the conditions of competition in industries that depend upon radio spectrum, including mobile communications and radio-based broadband services;
    • supporting the continued development and adoption of 5G Open Radio Access Network (O-RAN) protocols and software, promoting or encouraging a fair and representative standard-setting process, and undertaking other measures that might promote increased openness, innovation, and competition in 5G equipment markets;
    • prohibiting unjust or unreasonable early termination fees for end-user communications contracts, enabling consumers to switch providers more easily;
    • requiring broadband service providers to report broadband price and subscription rates to the FCC for the purpose of disseminating that information to the public in a useful manner, to improve price transparency and market functioning; and
    • preventing landlords and cable and Internet service providers from inhibiting tenants' choices among providers.

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