Strengthen Economic Competition
Background
A well-functioning economy is dependent on healthy and fair market competition. However, across nearly every sector of the U.S. economy, from tech to banking to food,[1] just a few companies control most or all of the market. In agriculture, a “get big or get out” federal farm policy has led to fewer farms and farmers and contributed to at least two generations leaving rural communities.
A September 2024 report illustrates the degree to which all aspects of the food and farm system have been captured, with the top four seed, fertilizer, meat processing, and farm machinery corporations controlling from 60% to 90% of their respective sectors – well over the 40% rate beyond which consumer abuses are likely.[2] On the ground, that means that many rural communities have only one or two stores, and farmers, ranchers, and other producers have equally few buyers for their goods. The lack of competition means that rural residents face higher consumer prices, lower producer prices, and less choice, while the consolidated business owners – often multinational corporations whose profits are not reinvested in the community – reap the benefits.
While much of the work to increase economic competition happens at the federal level, there is an important role for the states as well. This can include legislation like “right to repair,” addressing restrictive contracts that prohibit buyers from making repairs to equipment they own, from smartphones to tractors.[3] There are opportunities for state attorneys general to work with federal agencies like the Department of Justice (DOJ), Federal Trade Commission (FTC) to oppose unfair mergers and acquisitions,[4] or the U.S. Department of Agriculture (USDA) to address anticompetitive barriers in the food and agriculture sector.[5] As discussed below, the Biden Administration made significant advances in strengthening economic competition and implementing consumer protections; states can preserve these measures with these tools:
- Tools for Reforming Antitrust Policy: A Guide for State Lawmakers to Challenge Corporate Power
- How State Legislatures Can Protect Key Biden Consumer Protection and Small Business Rules
- Quick Fixes to Lock in Wins for Workers: How States Can Preserve New Federal Protections
Beginning with a July 2021 executive order[6] on competition, the Biden Administration took more significant action to level the playing field across all sectors than any administration since the New Deal. Some of these actions included: Congress took action in the same period as well, passing the Merger Filing Fee Modernization Act to increase the fees companies pay for proposed mergers[8] and the State Antitrust Enforcement Venue Act (28 U.S.C. § 1407), which supports state officials to prevent defendants from moving to what they consider a more favorable venue for an antitrust case. The federal and state legal frameworks to break up consolidated corporate power and uphold economic competition was created in response to the vast concentration of wealth of the late 1800s Gilded Age. A period of prosperity and relative fairness for workers, small business, and other regular Americans followed the passage of these laws – and since their passage, big business interests have been working to roll them back, with a deal of success under federal administrations of both major parties. The Biden Administration instead echoed the original intent of these laws, recognizing the corrosive impacts of consolidated corporate power on markets, consumer welfare, workers rights, and on the political process itself. This change took decades of work by advocates shining a public spotlight on the abuses of corporate power. The Trump Administration, on the other hand, signaled a friendly relationship with big business interests from Day One. It is uncertain if we will see continued watershed moments in federal antitrust action under this administration – and so this is the moment to take strong action at the state level. Economic competition, corporate accountability, and consumer and worker protections are a major focus of SiX’s work. For background and to learn more about about these issues in an agricultural and rural context, check out these resources: [1] Lakhani, Nina. “’They Rake in Profits – Everyone Else Suffers’: US Workers Lose Out as Big Chicken Gets Bigger.” The Guardian, 11 Aug. 2021, https://www.theguardian.com/environment/2021/aug/11/tyson-chicken-indsutry-arkansas-poultry-monopoly.[2] Musharbash, Basel. Farm Action. “‘Kings Over the Necessaries of Life’: Monopolization and the Elimination of Competition in America’s Agriculture System | Farm Action.” Farm Action, 26 Sept. 2024, farmaction.us/kings-over-the-necessaries-of-life-monopolization-and-the-elimination-of-competition-in-americas-agriculture-system. [3] Proctor, Nathan. “Half of U.S. States Looking to Give Americans the Right to Repair.” U.S. PIRG, 10 Mar. 2021, https://uspirg.org/blogs/blog/usp/half-us-states-looking-give-americans-right-repair. [4] https://www.cpr.org/2024/10/25/kroger-albertsons-merger-trial-closing-arguments/ [5] USDA Launches Historic Partnership With Bipartisan State Attorneys General to Help Reduce Anticompetitive Barriers Across Food, Agriculture Supply Chains.” USDA, 19 July 2023, www.usda.gov/media/press-releases/2023/07/19/usda-launches-historic-partnership-bipartisan-state-attorneys. [6] “Fact Sheet: Executive Order on Promoting Competition in the American Economy.” The White House, The United States Government, 22 Jan. 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/. [7] Exchange, State Innovation. “Iowa Farmers and State Legislators Say Keep Koch Industries Out.” State Innovation Exchange, 23 Apr. 2024, stateinnovation.org/iowa-farmers-and-state-legislators-say-keep-koch-industries-out. [8] “Klobuchar Bipartisan Legislation to Restructure Merger Fees, Strengthen Antitrust Enforcement Passes Congress.” U.S. Senator Amy Klobuchar, www.klobuchar.senate.gov/public/index.cfm/2022/12/klobuchar-bipartisan-legislation-to-restructure-merger-fees-strengthen-antitrust-enforcement-passes-congress.
Policy Priorities
- Federal: Pass essential reforms to update and strengthen antitrust policy for the 21st Century, including recommendations identified in the House of Representatives Report[9] on Competition in the Digital Sector and Senator Amy Klobuchar’s Competition and Antitrust Law Enforcement Reform Act.
- Federal: Pass the Food and Agribusiness Merger Moratorium and Antitrust Review Act
- Federal: Pass “right to repair” laws.
- Federal: Strengthen food labeling requirements, beginning with reinstating mandatory country of origin labeling (COOL) on beef and pork, such as in the American Beef Labeling Act. Multinational corporations currently use lax labeling requirements to manipulate and mislead consumers while taking advantage of American farmers and ranchers. USDA’s 2024 final rule “Product of USA” labeling requires that meat, poultry and egg products can be so labeled only when they are derived from animals born, raised, slaughtered and processed in the United States.[10]
- Federal: Stop corporations from promoting profits over workers by passing the Reward Work Act, which limits stock buybacks, and the Workforce Mobility Act, which prohibits most noncompete agreements that stifle entrepreneurship and trap workers.
- State: Support enforcement of antitrust laws.
- State: Demand transparency on state-level corporate lobbying. A 2023 report shows many states are missing lobbying disclosure requirements and those with disclosure laws have a mixed record of actual transparency.[11]
- State: Support multi-state efforts to oppose harmful proposed mergers, like the $25-billion attempted union of grocery giant Kroger with its competitor Albertsons, which was ultimately blocked.[12]
- State: Pass state-level “right to repair” laws.
[9] Nadler, Jerrold, and David N. CiCilline. Subcommittee on Antitrust, Commercial and Administrative Law, 2020, Investigation of Competition in Digital Markets: Majority Staff Report and Recommendations, https://judiciary.house
.gov/uploadedfiles/competition_in_digital_markets.pdf.
[10] USDA Finalizes Voluntary ‘Product of USA’ Label Claim to Enhance Consumer Protection.” USDA, 11 Mar. 2024, www.usda.gov/media/press-releases/2024/03/11/usda-finalizes-voluntary-product-usa-label-claim-enhance-consumer#:~:text=%E2%80%9CProduct%20of%20USA%E2%80%9D%20Final%20Rule,processed%20in%20the%20United%20States.
[11] Young, Robin. “SPECIAL REPORT: The Corporate State Lobbying Black Hole.” Sustainable Investments Institute, 13 Dec. 2023, siinstitute.org/reports.html.
[12] Sisco, Josh. “FTC, States Challenge Kroger’s $25 Billion Grocery Merger With Albertsons.” Politico, 26 Feb. 2024, www.politico.com/news/2024/02/26/ftc-krogers-albertsons-grocery-merger-00143287.
State Examples
- The New York 21st-Century Antitrust Act (2023 NY SB 6748B) would update antiquated antitrust laws to shift power from big corporations back to workers, small businesses, and communities.
- New Jersey (2022 NJ S 3778) proposed amending its Antitrust Act to make monopsony illegal and regulate dominant market entities.
- Pennsylvania (2024 PA HB 2012) proposed penalties for monopolization and monopsonization generally and specific requirements for healthcare mergers. In the prior session, the PA Stop Price Fixing Act (2022 PA HB 2641) aimed to prevent price fixing and a broad range of anticompetitive behavior and to protect whistleblowers.
- Minnesota (2023 MN HF 398) proposed imposing an abuse of dominance standard for antitrust regulation with a fine up to $1,000,000.
- Right to Repair: Nearly all 50 states have considered right to repair legislation; these are several that have passed a version:
- Colorado (2023 CO HB 23-1011) passed the Consumer Repair Bill of Rights Act, the first to ensure the right to repair agricultural equipment.
- Michigan (2023 MI HB 4673) proposed a similar Agricultural Equipment Repair Act.
- New York (2022 NY A 7006B) passed the nation’s first electronic right to repair bill, though many critics pointed to ways it was watered down just before it was signed into law.
- Oregon (2024 OR SB 1596) enshrined the right to repair for consumer electronics.
- Minnesota (2023 MN HB 1337) passed the the broadest right to repair law yet, though it exempts farm and construction equipment.
- State Attorney General actions:
- The Washington State attorney general sued 19 monopolistic poultry companies for conspiracy and price fixing in 2021. By early 2024, $3.5 million dollars had been recovered to the state through settlements with 15 of the producers accused of price fixing.[13] State attorneys general can also work with federal regulators in the Department of Justice or the Federal Trade Commission to object to mergers and acquisitions.
- In 2024, the New Jersey Attorney General created a new permanent Antitrust Litigation and Competition Enforcement Department.
Toolkits
Inspired? Ready to dig in on these issues with your rural neighbors? Our practical communications toolkits will help you connect with new communities through common values. The toolkits provide examples on narrative framing, press release templates, sample talking points, and more.
Click here for the communications toolkit on Promoting Fair Economic Competition.