The first antitrust law, known as the Sherman Act, was enacted in 1890 as a response to giant corporations with too much power. These companies controlled whole segments of the economy, and used their monopoly power to mistreat employees, drive down wages and overcharge their customers. The Sherman Act was used over the next few decades to break up companies like John D. Rockefeller’s Standard Oil, in 1911.
Fast-forward to 2021, and mergers and acquisitions between companies, known as consolidation, is again giving companies too much power to dictate prices for both their suppliers and their customers. Antitrust laws, designed to block these types of anti-competitive consolidations, are on the books but not fully enforced.
In layman’s terms: People feel like they’re being cheated by big business, that the government is in cahoots with these massive companies and that the “regular guy or gal” is left to fend for themselves. This is part of the narrative that Donald Trump rode to the White House, in 2016. I didn’t agree with his solutions, but he was smart to leverage this working-class animosity against the close ties between big business and government.
Thankfully, Democrats are starting to wake up to this reality. I fully support President Joe Biden’s appointments to the Federal Trade Commission to strengthen antitrust enforcement. Also, I cannot emphasize enough, the leadership of Sen. Amy Klobuchar — who is becoming the top advocate in Washington as the chair of the Senate’s antitrust subcommittee and working to ensure the government enforces the antitrust laws which exist.
Recently, the New York Times profiled the Minnesota senator, touting her determination to “make antitrust cool again” from her position on the Senate Judiciary Committee, and that the big tech companies should fear Klobuchar, for her grit and determination to ensure that their drive to global domination hits some road bumps.
You don’t need to be an expert in antitrust to understand that Facebook, Google, Amazon are too big and control too many aspects of American life and commerce. Common sense tells us that it’s dangerous when a company like Amazon dominates its suppliers. A company that needs Amazon to sell its chicken, rice, books, toys, or pet food – or any product, really – has little choice but to cut its prices and pay its workers low wages, in order to please Amazon.
While the antitrust problems with tech have garnered much of the media attention, there are other antitrust matters also begging for government intervention: Recently, my friend Hank Naughton, an U.S. Army veteran of multiple deployments to Iraq, and a longtime state lawmaker, penned an op-ed calling out Lockheed Martin, the largest defense contractor in the world, for trying to purchase a company called Aerojet Rocketdyne.
Should this acquisition occur, Lockheed would likely be able to dominate the missile industry, reducing innovation in this critical defense sector, resulting in rising costs for the American taxpayer, and less effective weapons. Keep in mind, Lockheed is the primary contractor for the F-35 fighter jet, which has become the most expensive, and possibly the greatest failure in military procurement in history.
Antitrust impacts nearly every nook and cranny in the economy. For example: Anyone who has been to the grocery store in the last year knows food prices are up. Yet why are farmers and ranchers in this country barely making ends meet, when people are willing to pay them more for their products? Well, because the system surrounding farming and ranching – who buys and sells their products – are controlled by just a handful of corporations.
According to the National Farmers Union: “The four largest multinational meatpackers control 54 percent of U.S. poultry processing, 66 percent of U.S. pork packing, and 85 percent of beef packing,” while “just four firms control 88 percent of corn seeds and 80 percent of soybean seeds.” The same American farmers planting those seeds must then turn around and sell their products to only four companies that process more than 85 percent of those commodities.
I am urging Democrats to follow Sen. Klobuchar’s lead, and break up these big companies and block unfair mergers and acquisitions that give too much power to massive corporations. Antitrust enforcement is good for the American people and smart politics.