WASHINGTON — President Joe Biden signed a sweeping executive order on Friday to promote more competition in the U.S. economy, urging agencies to crack down on anti-competitive practices in sectors from agriculture to drugs and labor.
If fully implemented, the effort will help lower Americans’ internet costs, allow for airline baggage fee refunds for delayed luggage, among other steps.
The order instructs antitrust agencies to focus on labor, healthcare, technology and agriculture as they address a laundry list of issues that have irritated consumers, and in the case of drug prices, has bankrupted some.
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“No more tolerance of abusive actions by monopolies. No more bad mergers that lead to massive layoffs, higher prices and fewer options for workers and consumers alike,” Biden said at a White House signing ceremony.
The president noted areas where advocates feel that prices are too high, wages are tamped down or new businesses excluded from competition. “Let me be very clear, capitalism without competition isn’t capitalism, it’s exploitation,” he said.
The White House says the rate of new business formation has fallen by almost 50% since the 1970s as large businesses make it harder for Americans with good ideas to break into markets.
Biden’s action goes after corporate monopolies across a broad swath of industries, and includes 72 initiatives he wants more than a dozen federal agencies to act on.
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Lower wages caused by lack of competition are estimated to cost the median American household $5,000 per year, according to a White House fact sheet that cites research from the American Economic Liberties Project – an influential Washington-based anti-monopoly group.
The initiatives will no doubt kick off a series of fights with the affected industries.
The powerful U.S. Chamber of Commerce issued a statement saying the move “smacks of a ‘government knows best’ approach to managing the economy” and pledged to “vigorously oppose calls for government-set prices, onerous and legally questionable rulemakings, efforts to treat innovative industries as public utilities, and the politicization of antitrust enforcement.”
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INTERNET, HEARING AIDS
Among the administration’s plans to open up the U.S. economy are new rules to mandate ending excessive internet contract termination fees, allow hearing aids to be sold over the counter and end non-compete clauses for millions of workers and many occupational licensing requirements.
Biden’s order pushes the Agriculture Department to act to stop what the White House called “abusive practices of some meat processors,” reacting to farmers and ranchers who sometimes say they face too few buyers for their animals.
The administration also seeks to make it easier for customers to switch banks and take their transaction data with them, and restore net neutrality rules that require companies to treat all internet services equally.
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Reuters first reported Biden’s plan to issue a competition executive order in late June and subsequently published stories on how it will impact industries such as farm equipment manufacturers, banking, rail and sea shipping.
The executive order will direct the Department of Justice and Federal Trade Commission (FTC) to carefully review mergers, and to challenge prior deals that have closed.
It directs the FTC to issue rules to address competition concerns from Big Tech companies, Facebook, Apple, Alphabet’s Google and Amazon, and limit “killer acquisitions” where large internet platforms acquire potential competitors.
FTC Chair Lina Khan and the acting head of the U.S. Justice Department Antitrust Division, Richard Powers, said Friday that they would soon launch a review of merger guidelines to determine if they are “overly permissive.”
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On prescription drugs, it aims to lower prices for consumers by allowing importation of drugs from Canada, where they are cheaper. It also urges the Department of Health and Human Services to draw up a plan to fight high drug prices, and gouging.
Evercore/ISI analyst Michael Newshel said in a research note that the impact of allowing imports from Canada on pricing would be limited given Canada’s limited drug supply and that Canada has indicated in the past that it would not cooperate with any program. He said the government’s decision to turn to executive orders on drug pricing was surprising given ongoing legislative efforts in Congress.
The executive order also establishes a White House Competition Council, led by the Director of the National Economic Council and including many cabinet secretaries, to monitor progress.
(Reporting by Nandita Bose, Jarrett Renshaw and Diane Bartz in Washington; Additional reporting by Caroline Humer and David Shepardson; Editing by Alistair Bell)
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In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.
China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.
That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.
(Bloomberg) — German business sentiment improved to its highest level in a year — reinforcing recent signs that Europe’s largest economy is exiting two years of struggles.
An expectations gauge by the Ifo institute rose to 89.9. in April from a revised 87.7 the previous month. That exceeds the 88.9 median forecast in a Bloomberg survey. A measure of current conditions also advanced.
“Sentiment has improved at companies in Germany,” Ifo President Clemens Fuest said. “Companies were more satisfied with their current business. Their expectations also brightened. The economy is stabilizing, especially thanks to service providers.”
A stronger global economy and the prospect of looser monetary policy in the euro zone are helping drag Germany out of the malaise that set in following Russia’s attack on Ukraine. European Central Bank President Christine Lagarde said last week that the country may have “turned the corner,” while Chancellor Olaf Scholz has also expressed optimism, citing record employment and retreating inflation.
There’s been a particular shift in the data in recent weeks, with the Bundesbank now estimating that output rose in the first quarter, having only a month ago foreseen a contraction that would have ushered in a first recession since the pandemic.
Even so, the start of the year “didn’t go great,” according to Fuest.
“What we’re seeing at the moment confirms the forecasts, which are saying that growth will be weak in Germany, but at least it won’t be negative,” he told Bloomberg Television. “So this is the stabilization we expected. It’s not a complete recovery. But at least it’s a start.”
Monthly purchasing managers’ surveys for April brought more cheer this week as Germany returned to expansion for the first time since June 2023. Weak spots remain, however — notably in industry, which is still mired in a slump that’s being offset by a surge in services activity.
“We see an improving worldwide economy,” Fuest said. “But this doesn’t seem to reach German manufacturing, which is puzzling in a way.”
Germany, which was the only Group of Seven economy to shrink last year and has been weighing on the wider region, helped private-sector output in the 20-nation euro area strengthen this month, S&P Global said.
–With assistance from Joel Rinneby, Kristian Siedenburg and Francine Lacqua.
(Updates with more comments from Fuest starting in sixth paragraph.)
When Moscow resident Zoya, 62, was planning a trip to Italy to visit her daughter last August, she saw the perfect opportunity to buy the Apple Watch she had long dreamed of owning.
Officially, Apple does not sell its products in Russia.
The California-based tech giant was one of the first companies to announce it would exit the country in response to Russian President Vladimir Putin’s full-scale invasion of Ukraine on February 24, 2022.
But the week before her trip, Zoya made a surprise discovery while browsing Yandex.Market, one of several Russian answers to Amazon, where she regularly shops.
Not only was the Apple Watch available for sale on the website, it was cheaper than in Italy.
Zoya bought the watch without a moment’s delay.
The serial code on the watch that was delivered to her home confirmed that it was manufactured by Apple in 2022 and intended for sale in the United States.
“In the store, they explained to me that these are genuine Apple products entering Russia through parallel imports,” Zoya, who asked to be only referred to by her first name, told Al Jazeera.
“I thought it was much easier to buy online than searching for a store in an unfamiliar country.”
Nearly 1,400 companies, including many of the most internationally recognisable brands, have since February 2022 announced that they would cease or dial back their operations in Russia in protest of Moscow’s military aggression against Ukraine.
But two years after the invasion, many of these companies’ products are still widely sold in Russia, in many cases in violation of Western-led sanctions, a months-long investigation by Al Jazeera has found.
Aided by the Russian government’s legalisation of parallel imports, Russian businesses have established a network of alternative supply chains to import restricted goods through third countries.
The companies that make the products have been either unwilling or unable to clamp down on these unofficial distribution networks.
