Anticipating a Future for Antitrust: Prioritizing Worker Welfare
When considering the topic of antitrust, what initially comes to the minds of many are the robber barons that are taught in high school U.S. History classes. Cartoons from the 19th-century often depict businessmen with comically large features controlling the government and a larger-than-life Teddy Roosevelt breaking up John D. Rockefeller’s Standard Oil Co. Perhaps others think of more contemporary issues, such as the rising power of Amazon, Facebook, and Google. Antitrust, a subject area that generally receives little popular attention from the media, has recently been making headlines. With President Biden’s executive order, “Promoting Competition in the American Economy,” and Lina Khan’s role as Chair of the Federal Trade Commission (FTC), it is valuable to explore the future of antitrust law and more specifically, its intersection with labor.
Lina Khan was appointed to be Chair of the FTC in 2021. Her confirmation promised a departure from the status quo in antitrust enforcement. Notorious for her renowned Yale Law Journal article titled “Amazon’s Antitrust Paradox,” Chairwoman Khan has advocated for tougher antitrust enforcement, ranging from actions against Big Tech companies to the pharmaceutical industry. Recent efforts by the Biden administration and Chairwoman Khan to maximize competition in labor markets are amongst their most striking actions. With workers demanding fairer contracts and better wages, there is an opening for this antitrust labor moment to amount to a movement.
For workers, the last several decades can be effectively characterized by severe wage stagnation, weak purchasing power, and reduced bargaining power. Labor's share of national income is declining. Workers are being harmed by “monopsony power,” which occurs when one employer faces little competition. This trend is well documented, as the FTC found at least 40% of jobs fall into “highly concentrated” markets. If a market is highly concentrated, employers have little incentive to increase wages or set fair contract terms given there are not as many other employers in that industry to attract workers. Prominent economists have connected these issues to heightened income inequality. It is possible that the challenges facing workers can be addressed by expanding the scope of antitrust laws.
Since the 1970s, antitrust has been guided by the “consumer welfare standard.” Born out of Chicago School economics, the consumer welfare standard prioritizes what its name indicates: consumers. Typically, so long as consumers are met with low prices, a firm’s behavior is permissible. But what happens when consumers are met with low prices and workers are trapped with low wages because of employer concentration? This question is one that antitrust must consider when attempting to combat rising income inequality.
The FTC is ramping up its efforts to protect workers from anticompetitive practices. This summer, the FTC announced a partnership with the National Labor Relations Board to closely collaborate on addressing labor market concentration. Chairwoman Khan, in conjunction with these efforts, is scrutinizing labor market power in merger analysis, non-compete provisions in contracts, and freedom in labor organizing. President Biden’s 2021 executive order further emphasized the administration’s policy to combat concentration in labor markets. The future success of such actions, however, could necessitate Congressional action. Judges across the country generally adhere to the consumer welfare standard, so it may be out of the bounds of current judicial statutory interpretation to permit such antitrust actions absent legislative changes.
Congress is exploring antitrust legislation aimed at addressing the growing dominance of Big Tech companies. A bipartisan group of lawmakers introduced the American Innovation and Choice Online Act (AICO), which would prevent Amazon and Google from prioritizing their own products over that of their competitors on their online platforms. The legislation has been met with fierce resistance from the major tech companies. However, AICO is unlikely to receive a vote prior to the November elections. Passage is not guaranteed. Admittedly, such legislation does not have the primary intention of combatting highly concentrated labor markets. But it does demonstrate Congress’ heightened attention on antitrust law as a solution for economic trends targeting the little guy.
The intersection of antitrust and labor law is having a moment in U.S. politics. What remains to be seen is how this moment will manifest itself. Will it become a movement for worker protections or a fleeting attempt to regulate labor abuses? The Biden administration, and more specifically the FTC, have directed attention to anti-competitive behavior in labor markets in a way attention has never been brought before. However, given the judiciary’s use of a 50-year-old standard, employers may evade antitrust action and eventually be remembered in U.S. History classes as the robber barons of the 21st-century.
