Webster’s Dictionary defines “conservative” as “marked by moderation or caution” and “disposed to maintain existing institutions.” Oxford describes a conservative as “a person favoring free enterprise,” while Cambridge agrees that a conservative “traditionally supports business and opposes high taxes and government involvement in industry.”
For four decades, the nation’s antitrust posture has been fundamentally conservative across administrations of both parties. Starting with the Reagan administration, Congress and the antitrust agencies have largely given the private sector room to prosper. The government typically intervenes only when evidence shows that business practices harm consumers, and even then only through case-by-case adjudication that refines the law slowly, over time.
Unfortunately, the recent spate of antitrust proposals reject conservatism in any and every conceivable sense of the word. These proposals would give far more power to federal agencies to intervene in the economy, let the government pick winners and losers, embolden an independent agency that already stands on dubious constitutional footing, upend decades of precedent from conservative heroes, and help our most significant foreign rival, China, while simultaneously crippling our own private sector’s ability to innovate and invest.
Just as Steph Curry and Tom Brady can’t tell you all about Subway in one commercial, one op-ed can’t possibly discuss, in any depth, all the things that aren’t conservative about these proposals. But here’s a start:
The proposals reject decades of conservative antitrust thinking. Since the 1980s, the government has embraced Robert Bork’s consumer welfare standard as the touchstone for antitrust law. This standard evaluates business conduct for its effect on consumers, not for its effect on individual competitors. No longer. The current round of proposals protects competitors, even to the detriment of consumers, by requiring companies to share data with their competitors, preventing them from competing on price via low-cost private labels, and generally restricting their ability to compete on the merits.
The proposals pick winners and losers in the marketplace. Many bills overtly target particular tech companies while leaving alone many of their nearly-as-large competitors. For instance, one bill regulates companies that exceed $600 billion in market capitalization today – a seemingly arbitrary number that happens to exclude a number of brick-and-mortar competitors and companies in other industries, as well as all foreign companies. No member of Congress, of any ideological stripe, would allow his or her large home-state employers to face restraints that apply unevenly across the board.
The proposals would embolden the Federal Trade Commission (FTC). The proposals would grant enormous power to the FTC, an independent agency that wields executive, legislative, and judicial power, and whose progressive chair has been accused by her fellow commissioners of muzzling staff, concentrating power, and importing progressive social values into antitrust enforcement. Yet, rather than cabin the FTC’s authority or move toward a unitary executive, the proposals would afford the FTC broad discretion to determine whether companies are “unfairly” preferencing their own products, “materially” restricting competition, or serving as “critical” trading partners. Under some proposals, companies could not even seek judicial review of agency decisions. The FTC then could impose tens of billions of dollars in civil penalties untethered to actual consumer harm.
The proposals would hobble many of the nation’s most successful companies and discourage investment in smaller ones. The proposals would force targeted companies to “structurally separate” into single lines of business and require them to seek the government’s permission before engaging in routine business conduct, such as small acquisitions that traditionally raise no competitive concerns. If adopted, these ideas would deprive consumers of the benefits of economic integration, discourage investment in start-ups, chill the competition that is the lifeblood of American exceptionalism, and likely leave the dismembered companies more vulnerable to cyberattacks and less able to fund pure research and development. Moreover, many of these proposals could extend beyond the technology sector into sectors such as health care, energy, and transportation.
The proposals would benefit China, at America’s expense. Astonishingly, most of these proposals would exempt Chinese companies from their ambit. They would structurally separate American companies, limit their ability to merge, and require them to share sensitive data with their Chinese counterparts, while leaving Chinese and other foreign companies untouched – and as the largest technology companies in the world.
The current antitrust proposals embody the antithesis of conservative tradition and belief. Although conservatives certainly have legitimate complaints with several large technology companies, those concerns should not lead them to abandon their beliefs in limited government, free markets, the rule of law, and a strong economic foundation that promotes prosperity at home and deters adversaries abroad.
As a steadfast conservative leader, we are urging Senator Grassley to continue his legacy of protecting American innovation. If we don’t, China could easily surpass America as the global tech leader.
Asheesh Agarwal held senior roles in the Bush and Trump Administrations. He serves as an advisor to the American Edge Project.