Must-Read: : The Most Important 2016 Issue You Don’t Know About: “We’ve seen plenty of economic issues discussed…
…in this presidential election…. But… practically every major American industry has become extremely concentrated, and this creeping monopolization has increased inequality, created economic hazards where they previously didn’t exist, and heightened public anxiety…. A remarkable hearing in Washington yesterday actually addressed this. And senators from both parties agreed with unusual bluntness and unanimity: Far more needs to be done to fight monopolies and keep them from hurting our economy and our people. Here’s why this hearing was important: We’ve had antitrust laws on the books for over a century to fight industry consolidation. But weak enforcement and an ideological disposition to trust the market to self-correct has diminished antitrust to almost nothing. The fact that both parties want the government to stop monopolies could finally force the agencies to get aggressive and protect the economy.
At a Senate Judiciary subcommittee hearing on antitrust oversight, the first such hearing in three years, everyone—Democrats, Republicans, and the two witnesses, Federal Trade Commission (FTC) chair Edith Ramirez and assistant attorney general of the antitrust division William Baer—agreed that there had been a ‘tsunami’ of mergers and acquisitions (M&A) recently…. Senator Mike Lee, the Utah Republican who chairs the subcommittee, worried that the agencies lack the resources to deal with the merger wave. Ranking member Amy Klobuchar, the Minnesota Democrat, questioned the ‘conduct remedies’ agencies use in lieu of blocking mergers…. Perhaps nobody lit into the antitrust agencies more than Connecticut Democrat Richard Blumenthal…. There have been some successful merger challenges in recent years, from Time Warner Cable/Comcast to Sysco/U.S. Foods to AT&T/T-Mobile. But… more often the agencies impose conditions….
When questioned… the antitrust enforcers appeared to pad their stats. Ramirez, the FTC chair, mentioned on numerous occasions a $1.2 billion settlement with Teva Pharmaceuticals, over a ‘pay-for-delay’ deal it reached with generic manufacturers, preventing competition to its sleep-disorder drug Provigil. But Klobuchar pointed out that the total harm to consumers in increased prices has been estimated between $3.5 and $5.6 billion. ‘The defendant got to keep 70 to 80 percent of the profits,’ Klobuchar said. Ramirez only replied that the FTC tries to estimate the appropriate penalty. We need competition because it benefits consumers on price and quality—there’s no incentive for a monopoly to deliver good service if consumers have no options. We need it because consolidation creates a few winners economically amid many losers, and they use that power to influence politics and take even more gains. We need it because any problem with one big bank or one big food distributor magnifies when the company is one of a precious few. Amazingly, Wednesday’s hearing showed that antitrust policy is not a partisan issue…