The Biden administration’s “whole-of-government” antitrust crusade reached a new level of absurdity when the Federal Trade Commission’s (FTC) acted to block the merger of Tapestry and Capri, the owners of luxury brands like Coach and Michael Kors.
This merger, which other regulators around the world have approved, is now under scrutiny due to the FTC’s misguided approach to antitrust that doesn’t prioritize consumer needs. The goal of the merger was to enable the American companies to be able to effectively compete with LVMH, the largest company in this industry (they own Burbury, Louis Vuitton, Marc Jacobs, Christian Dior, Tiffany and Fendi, to name a few).
This block is the newest example of the Biden administration’s antitrust officials impeding market competition through their misunderstanding of how markets work. Consumers who benefit from the innovation and choice that result from a competitive marketplace are the ones who ultimately suffer from these flawed policy choices.
Biden’s enforcers approach antitrust enforcement as progressive tool that blames businesses for what they believe are “problems.” Meanwhile the White House is ignoring the fact that their own policy choices, on everything from increased red tape to labor costs, are enabling prices to increase.
Aggressive pushes for mandatory unionization and increased base-pay by the administration has forced many businesses, particularly in the restaurant and retail sectors, to raise prices to offset higher labor costs. The regulatory crackdown on the energy industry has led to higher gas prices, which in turn drive up transportation and production costs for businesses across the economy. Even the Biden administration’s excessive spending and fiscal policies have contributed to inflationary pressures, as the flood of government stimulus has devalued the dollar and made it more expensive for businesses to acquire the goods and services they need to operate.
Rather than analyzing how public policy choices enable these issues, the White House has launched a “strike force” to target and penalize businesses for competing in ways the administration dislikes. This strike force represents a significant intervention in markets, led by progressive ideologues from the Department of Justice (DOJ) and FTC who have already lost major court cases and cost Americans their jobs.
The whole-of-government effort targets a wide array of sectors, including prescription drugs, healthcare, food and financial services, using vague and unclear language that leaves businesses with little clarity on how to react to this new regulatory threat.
So far, this strike force has stopped Amazon acquiring mid-tier robot vacuum company Roomba, halted the mid-tier airline merger of JetBlue and Spirit, and ended the joining of Albertsons and Kroger. So far, the results of these ideological intrusions have meant the loss of jobs for 30% at Roomba and Spirit airlines flying towards bankruptcy. This is supposedly how big government thinks it can “help.”
By choosing winners and losers based on the government’s preferences, the Biden “strike force” will chill investment and innovation in critical sectors of the economy. This is backed by the progressive idea that the government knows better than consumers, when in reality, consumers are sending important signals to businesses about what they want and don’t want in the marketplace—including on prices.
Effective competition policy enables businesses of all sizes to compete at lower costs through pro-growth deregulation efforts. Thankfully, Republican leaders in Congress are looking out for consumers. Last week, House Oversight Committee Chairman James Comer sent a letter to Chair Khan, requesting more information on the FTC’s role in Biden’s “strike force.” Chairman Comer is specifically concerned that Chair Khan is using antitrust as a political weapon.
The House Judiciary Committee, led by Jim Jordan, also recently reported on the FTC’s abuse of power and wasted resources under Chair Khan. The report reveals how Chair Khan has undermined the work of the FTC by consolidating power, micromanaging investigations, and eschewing important consumer protection work in favor of a radical political agenda.
It is clear that Congress must act to rein in the FTC’s overreach and ensure that consumer protection agencies focus on their core mission of safeguarding consumer interests, not advancing political agendas.
The One Agency Act, which would consolidate the DOJ’s Antitrust Division and the FTC’s competition enforcement functions into a single agency, is a step in the right direction. This legislation would streamline antitrust enforcement, reduce bureaucratic inefficiencies and ensure that antitrust policy remains focused on protecting consumers and promoting competition.
Courts must continue to serve as a check on the administration’s abuse of power and hold the agency accountable when it oversteps its legal authority. Recent court decisions blocking the FTC’s attempts to challenge mergers, such as the Microsoft-Activision Blizzard and Meta-Within Unlimited deals, demonstrate the importance of judicial oversight in curbing regulatory overreach.
As the Biden administration’s whole of government assault on American businesses continues, it is imperative that a whole of Congress and the courts intervene to protect consumers, promote innovation and preserve the American economy.
The FTC just came for your purse, and the results will come for your wallet.
Image generated by NetChoice using ChatGPT’s DALL-E.