SENIOR ADMINISTRATION OFFICIAL: Thanks. Promoting competition to lower costs and support small businesses and entrepreneurs is a central part of Bidenomics.
When the President took office, concentration had increased in over three quarters of U.S. industries. In the President’s view, that reflected that, quote, “Forty years ago, we [had chosen] the wrong path…following the misguided philosophy of people like Robert Bork, and pulled back on enforcing law to promote competition.” That harmed our economy.
One estimate found that higher prices and lower wages caused by lack of competition was costing the median American household as much as $5,000 annually.
So to turn the tide, almost exactly two years ago, President Biden signed a landmark executive order establishing the White House Competition Council and directing a whole-of-government approach to promoting competition.
Tomorrow, the President will convene the fifth meeting of his White House Competition Council, which will be marking both two years of progress since the competition executive order was signed and announcing new progress in this space.
In just those first two years, we’ve already delivered concrete results for American consumers. For example, the President signed into law the bipartisan Ocean Shipping Reform Act, which lowers costs for American retailers, farmers, and consumers. Ocean shipping prices are now down more than 80 percent from their peak.
Today, hearing aids are now available on shelves in stores without a prescription, saving the estimated 30 million Americans with hearing loss thousands of dollars to repair.
Thanks to the CFPB cracking down on banking overdraft and bounced check fees, those fees are going down an estimated five and a half billion dollars annually.
To give another example, DOT called out airlines’ bad service and got results. Previously, none of the 10 largest U.S. airlines guaranteed meals or hotels when they caused a cancellation or significant delay, and no airline guaranteed that parents could sit with their kids for free. Now, thanks to DOT’s use of the bully pulpit, 9 of the 10 largest airlines guarantee hotels, 10 airlines guarantee meals, and 3 airlines guarantee free — fee-free family seating.
So that’s just some of the concrete results we’ve already delivered.
Tomorrow, with the White House Competition Council meeting, you’ll also see new progress, new initiatives breaking new ground on promoting competition.
My colleagues from the agencies are going to speak to these initiatives in a moment, so I’ll be brief.
First of all, when President Biden signed his executive order, he said, quote, “No more bad mergers that lead to mass layoffs, higher prices, fewer options for workers and consumers alike.” He called for the Department of Justice and the Federal Trade Commission to consider revising their merger guidelines. Tomorrow, the agencies will be publishing their revised guidelines for public comment.
Second, the Department of Agriculture is announcing a new partnership with a group of 32 bipartisan state attorneys general that’s going to ramp up enforcement of antitrust and consumer protection laws that will help stop conduct like price fixing or price gouging in grocery retail markets, meat and poultry processing, and other agricultural markets.
Third, you’ll see us launch a new front in the war on junk fees, housing rental fees. These are fees like rental application fees that can really add up. So, for example, it can cost $100 or more for each rental application, which is more than the cost of running a background check. My colleagues from the White House and HUD are going to talk about new actions the private sector and the administration are taking to expose these hidden and unfair fees.
So with that summary, I’ll turn it over to [senior administration official] and [senior administration official] to explain the merger guidelines announcement.
SENIOR ADMINISTRATION OFFICIAL: Thanks so much, [senior administration official]. Hi, everybody. Good afternoon. As we heard from [senior administration official] and as noted in the executive order, markets across the economy have undergone significant consolidation in recent decades in ways that is now costing consumers, costing workers, costing entrepreneurs, and costing communities. And we really need a whole-of-government approach to combat these competition problems.
One key plank of this effort is robust and reinvigorated merger enforcement. Congress, back in 1914, prohibited mergers that may substantially lessen competition or tend to create a monopoly. And in the decades since then, Congress has continued its commitment to competition over consolidation, and the FTC and antitrust division are charged with effectuating that mandate.
Back since 1968, the DOJ and FTC have issued an enforcement manual, known as the Merger Guidelines, that lay out for the public how we go about assessing whether mergers may be unlawful.
As we undertook this revision, there were a few key pillars that really animated this effort. One was making sure that we’re updating our framework to match today’s market realities.
I think we’ve seen, all too often, various blind spots that have led to missed opportunities and unfortunately contributed to some of this consolidation. And one of the things that we really prioritized was hearing from the public.
We got over 5,000 comments — spanning from farmers, from healthcare workers, from pharmacists, from musicians — sharing with us their firsthand experience with consolidation. And so we took all of that information and experience, and it’s reflected in our update to the guidelines that we want to make sure is reflecting the reality of how businesses are operating today and how they’re competing.
A second key pillar is deep fidelity to the laws passed by Congress and the interpretation of those laws by courts. Our teams really did a deep dive to make sure that these guidelines are fully faithful to that case law and to the statutes that Congress passed.
And lastly, our revised guidelines really seek to provide clear administrable guidance to the public and to market participants. Want to make sure that this document is providing clarity and certainty, and making very clear how it is that the agencies are going to go about doing their merger enforcement.
I will turn it now over to [senior administration official]. I’ll just say, we are — at the FTC, are really, really grateful for the very strong partnership that we’ve had with the DOJ as we’ve put together these revised guidelines.
SENIOR ADMINISTRATION OFFICIAL: Thank you, [senior administration official]. And let me also reiterate the incredible partnership with the Federal Trade Commission at all levels, including [senior administration official], but at the fed- — among career staff, as well, and also acknowledge the important, essential contributions that have (inaudible) from our career staff at both agencies, who have played an essential role in drafting these guidelines, which we’re very proud of.
As [senior administration official] indicated, there are — this is an important milestone for our agencies.
Since 1968, both agencies have issued guidelines to help explain agency practice and reflect the legal principles that have been set forth by Congress and interpreted by courts, including the Supreme Court.
And so we are really thrilled that we can mark this important achievement to issue draft guidelines in accordance with the President’s executive order on competition.
As [senior administration official] indicated, there are a number of (inaudible) principles that I’d like to build on.
First is: Since the guidelines were first written in 1968, we’ve seen so many changes in our economy. Just think about your — your daily experiences. Certainly, we don’t have phones with rotors, and we keep our documents in the cloud rather than cabinets. And those fundamental shifts in market realities necessitate a shift in how we apply the law to the facts on the ground. And therefore, we’ve undertaken an effort to do state-of-the-art economics and a complete assessment of the law and market realities to bring our guidelines up to date.
Second is: We undertook, as [senior administration official] indicated, a rigorous review of all the legal statutes, including the Clayton Act, as well as all prevailing and relevant precedent to make sure that we were getting this right as a matter of law. And these will be the first guidelines ever to cite to the law, and we do so repeatedly, because the facts and law are what are guiding us here today, and as we apply — as law enforcement authorities and as we apply to the law.
Finally, as [senior administration official] indicated, these are guidelines for the public. That includes participants in the market, as well as all affected parties, whether they’re workers, consumers, or entrepreneurs. And we believe it’s extremely important that these guidelines are accessible to the public at large. And so, we’ve created them with that in mind so that they can be read and understood at the highest level by anybody who cares about antitrust enforcement corporate consolidation, while at the same time providing the rigorous and detailed tools that are necessary to undertake a thorough review of a particular transaction.
So we’re really eager to present these to the public, which we’ll do so starting tomorrow at 5:00 a.m. And then we will have a robust and fulsome comment period that — where we eagerly await input from the public before we finalize this draft guidelines.
SENIOR ADMINISTRATION OFFICIAL: Good afternoon, everyone. This is [senior administration official] with USDA. And thanks so much for the chance to participate in this press call to highlight how the Biden-Harris administration is increasing competition and also investing in rural communities.
We all know that for far too long, farmers and ranchers have been harmed by a consolidated industry that’s led to bigger farms and fewer farmers. So, thanks to President Biden’s Investing in America agenda, the President — the President’s executive order to promote competition in the American economy, and the Biden-Harris administration’s action plan for a fairer, more competitive, and more resilient meat and poultry supply chain, we’re dedicating resources to make sure rural communities see their fair share of the benefits to support producers and to increase choice and lower prices for consumers.
As one key part of this effort, tomorrow we’ll be launching a historic partnership with attorneys general from 32 states and the District of Columbia to help reduce anti-competitive barriers across food and agriculture supply chains.
Under this new agricultural competition partnership, USDA is investing in opportunities to combine state and federal authorities to tackle anti-competitive market structures and practices and price gouging in food, agriculture, and related industries.
Specifically, this initiative will enhance the capacity of state attorneys general to conduct on-the-ground assessments of competition issues, enhance coordination between federal and state agriculture and competition authorities, create new and more independent research programs, and ultimately result in fairer and competitive markets and more resilient supply chains.
Another key part of our efforts is that USDA will continue to make significant investments to expand meat and poultry processing capacity. We’re doing this by dedicating resources to expand independent processing capacity and support workers.
Most recently, last month, USDA announced 15 awards totaling $115 million in 17 states through the Meat and Poultry Processing Expansion Program — MPPEP — and the Meat and Poultry Intermediary Lending Program — MPILP.
In the coming months, we look forward to continuing to deliver on our top priorities, which include finalizing our proposed rules promised under the Packers and Stockyards Act, which would enhance transparency for growers, promote market access for producers, and level the playing field.
We’re also executing on the Farmers Seed Liaison initiative, which will enhance competition by enabling our IP system to reward innovation while keeping natural and open-source seeds — seed resources more available for researchers as well as for farmers.
Additionally, we’ll implement — we’ll continue to implement our Agricultural Competition Partnership, which was announced today, and we will continue to roll out additional investments in independent meat and poultry processing capacity expansion.
USDA is proud to support President Biden’s executive order to take on challenges for producers, rural communities, and consumers by promoting competition in America’s food and agricultural markets, delivering benefits for farmers and ranchers, and lowering food costs for working families.
We look forward to helping spearhead President Biden’s vision for growing the economy from the middle out and the bottom up, doing so by increasing competition and empowering farmers, workers, and small businesses.
Thanks for letting me participate in this call.
SENIOR ADMINISTRATION OFFICIAL: Great. Hey, everyone. So, tomorrow, the President will launch a new effort to crack down on junk fees in the rental housing market. I imagine nearly every American household can relate to this issue. These fees come in many forms.
At the front end of the apartment search, people often pay application fees of $50, $60, $100 or more per apartment, and have to do it many times over if they’re applying to multiple units. This can add up to hundreds of dollars.
Most concerningly with these fees is that they often far exceed the amount in cost for a housing provider to actually run the background and credit check. Then, once an individual manages to secure an apartment, they’re often surprised to be charged a number of fees just to move in or to cover services that they assumed were included to begin with, things like a few bucks to pay your rent online or a $10 a monthly trash fee — services that you assumed were included in the underlying rent.
And so, tomorrow, the President will announce a new effort to address these hidden fees and really help consumers more effectively comparison shop when they’re making this important decision.
First, three major rental housing platforms — Zillow, Apartments.com, and AffordableHousing.com — are launching new features on their websites to prominently display these fees up front so that consumers can see the true cost of various apartments and comparison shop accordingly.
Zillow’s new interface will be launching tomorrow, and Apartments.com and AffordableHousing.com will be live in the coming days and weeks.
These actions are hugely impactful as tens of millions of Americans search for housing on these sites every single month.
I’ll turn it over to my colleague, [senior administration official], from HUD to share more.
Back in March, Secretary Fudge, our HUD Secretary, issued a call to action to state legislators and other stakeholders to address the issue of fees in rental housing. And these folks have delivered in a big way.
SENIOR ADMINISTRATION OFFICIAL: Thank you, [senior administration official]. Good afternoon, everyone. Today’s announcement signifies the Biden and Harris administration’s commitment to work across agencies to encourage landlords to increase transparency and fairness in rents, and limit junk fees.
HUD is pleased by the industry response to the Secretary’s call to action. In addition, today, HUD’s Office of Policy Development and Research is releasing a new brief that highlights state, local, and private sector strategies to encourage fairness and transparency in the rental market. We hope this research will help policymakers, influencers, and businesses see how eliminating junk fees helps entire economies thrive.
In a variety of states, leaders have taken up the charge the Biden-Harris administration set this winter: working to crack down on rental housing fees on the local level.
Take Colorado, for example, where Governor Polis signed into law House Bill 1099, which allows prospective renters to reuse a rental application for up to 30 days without paying additional fees, and House Bill 1095 to prohibit a rental agreement from including any provisions that charge fees to tenants that failed to provide a non-renewable notice that disguise fees as rent or that enable landlords to profit from third-party services.
Or look to Rhode Island, which signed into law House Bill 6087 to prohibit a landlord, lessor, broker, or property management company from requiring or demanding rental application fees.
This news today shows that our commitment to ensuring transparency, fairness, and affordability in housing are not just words. We are delivering with concrete, real action to make the lives of renters across this country better.
MODERATOR: Thank you, [senior administration official] and everyone, for your comments. We’ll now turn it — have about 15 minutes for questions.
Please raise your hand if you have a question. I will note, we have Comm folks — Comms folks from across our agencies who stand ready to answer your technical questions.
But I’ll now turn it over to Josh Sweigart, who I believe I saw had the first hand up.
Q Hi, thanks so much for doing this. You walked us through the principles behind a revised merger guidelines. But I’m wondering, if you had to explain to an average reader of the Daily Dayton News what do these guidelines do that the previous version didn’t include? How have the standards changed? And what impact would it have on their lives?
SENIOR ADMINISTRATION OFFICIAL: Sure. This is [senior administration official]. I’ll start and then turn it over to [senior administration official].
But these guidelines explain how mergers, concentration enforcement, and antitrust laws affect people on a daily basis. They explain how they can be applied (inaudible) people get benefits of competition in terms of earning a higher wage or getting better benefits at work. It talks about how farmers can get more for their cattle and their grain by having more competition in the agricultural markets. It explains the reality of market platforms and the acquisition of data and how mergers and concentration affect average people on a daily basis with respect to how those platforms affect their lives.
And so, we’ve gone — we use painstaking efforts to make sure that we are explaining this in a way that is not only relevant but resonant with the broader public.
SENIOR ADMINISTRATION OFFICIAL: And one thing I’ll add to that is: You know, to be clear, these guidelines don’t — do not constitute new law. They are an interpretation of existing law and existing case law.
Just to give another example, you know, there’s a chapter in the guidelines that lays out how we would go about assessing mergers that may harm competition and labor markets. This is a longstanding principle that antitrust is supposed to protect everybody, including workers. We heard a lot from workers during our review process, including about specific ways in which mergers can harm workers.
So, in the — in the proposed guidelines, we really go through, in some detail, some of the different ways in which mergers can have that effect. So, consolidation that hurts workers can result in lower wages for workers, but it can also result in worse working conditions.
We heard from workers, for example, that one way in which consolidation hurts them is that merged firms will make their schedules less predictable and give employees less control over what their work looks like.
And so, these guidelines really represent a much more nuanced, on-the-ground view of the different ways in which illegal mergers can hurt people, including workers. And we were really grateful for that insight that we wanted to make sure is being fully reflected in this document.
MODERATOR: Great. And I’ll turn it over to Cecilia Kang at New York Times.
Q Thank you so much for that answer, [senior administration official], and for everyone for this call.
Piggybacking on that, can you address whether — in the — the full document, what you say that’s different or specific about digital markets; the consumer welfare standard, if there’s any talk about that; and, specifically, on vertical mergers, if there’s discussion about whether, in your guidelines, there should be less of a — a leaning towards the theory that vertical mergers usually lead to efficiencies? So three buckets: the consumer welfare standard; digital markets, most importantly; and vertical mergers and efficiencies within.
SENIOR ADMINISTRATION OFFICIAL: Sure.
So, Cecilia, you’ll note that one of the guidelines talks specifically about platforms and the ways in which platforms are competing, right? So sometimes you’ll see competition between platforms to serve as the core platform. Sometimes you’ll see (inaudible) competition on the platform. And then sometimes you’ll see competition to replace the platform, especially when we see new technologies. So the guidelines reflect those different dimensions of — of how competition can manifest in some of these markets.
It also goes into some detail about the ways in which mergers in particular can undermine competition in platform markets. So, you know, if a firm is — is making an acquisition that will make it more difficult for consumers to multihome and choose between different platforms, you know, that would be relevant to us. If a merger would enable a dominant firm to deprive rivals of scale or network effects, that’s something that would be relevant to us.
So I would say, overall in the last decade, we’ve just seen a huge amount of learning around the different ways in which competition presents itself in digital markets. And we wanted to make sure that this document is fully representing all of those mechanisms of competition as we’ve seen them present themselves in these markets. And so, would — would direct you to that — to that guideline in particular.
MODERATOR: Thank you so much. Now turning it over to Andrea Shalal at Reuters.
Q Hey. Thank you so much for doing this. I have a couple of questions. I’ll wrap them into one, but —
The U.S. Chamber is accusing the Biden administration of regulatory overreach with all of these Competition Council and, you know, anti — you know, cracking down on anti-competitive practices. You know, to what extent are you seeing any kind of shift in the way that industry is responding?
And, you know, you’ve talked a lot about using the bully pulpit from the White House, in addition to sort of the specific actions you can take. Is that making any difference?
And then I wanted to ask about the — on the housing front, specifically, whether you view these junk fees that are in the housing market as contributing to what has been a very sticky, sort of, you know, high-rental-housing costs that have not come down as much as one would have expected, in terms of cracking down on inflation.
SENIOR ADMINISTRATION OFFICIAL: I can take a stab at that.
I think, to your first point, you know, we see free and open competition as the cornerstone of capitalism, as the President has said many times. So we don’t see our agenda is — as in any way in opposition to industry. We see it as it creating — as it fundamentally being about creating more opportunities for small businesses and entrepreneurs to compete on the merits and thrive.
I think the housing industry commitments we’ve seen today are an example of industry stepping up in response to the President’s call to action on — on junk fees.
We’ve also seen bipartisan progress on issues like ocean shipping, where we passed the Ocean Shipping Reform Act.
We worked with Congress on a bipartisan basis to secure more funding for our antitrust enforcement agencies.
There’s, you know, also bipartisan support for addressing noncompetes. Many aspects of this agenda, ag competition as well, have broad-based support.
On the housing costs question, I think one of the reasons that it’s so important that we’re cracking down on rental application fees, for example, is that in a tight rental market, people are sometimes paying these costs multiple times. Because, right now, you have to pay — you have to do multiple applications to find an apartment. And so, we see these fees can really add up if at each time you’re having to pay $100 just for applying to — to get an apartment.
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration official] from USDA. I’ll just add to the bipartisan piece.
So the 32 attorneys general — it’s a bipartisan group of attorneys general and truly reinforces how bipartisan the competition initiative is, recognizing that a fundamental part of Bidenomics is both investing in rural people and building the economy through the middle class and from the bottom up and the middle out.
One example for the Chamber of Commerce about how the investments that we’re making are investing in businesses as well is some of the small and independent meatpacking companies that we’re investing in.
So I — I came from a — recently visited a meatpacking processing plant in Ohio — a small processing plant. We were providing an opportunity for them. We were also providing an opportunity for the farmers and ranchers in the area. Because of the specific labeling opportunities that came from that boutique meat packager, they were able to access bigger markets in other places.
So, by investing in competition, we’re also investing in small businesses.
MODERATOR: Thank you so much, [senior administration official] and [senior administration official]. I’ll now turn it over to Joshua Sisco at Politico.
Q Hi, thanks for doing this. I have an ag-related question. In the House appropriations bill, I believe there was language around House Republicans wanting to block the USDA from implementing the packers and stockyards rulemaking. I’m wondering how the White House and USDA is planning to work with lawmakers to protect this part of the competition agenda. Thanks.
SENIOR ADMINISTRATION OFFICIAL: Thanks so much. The Packers and Stockyards Act is a fundamental part of the competition agenda, and it’s a priority for us. As you know, we have two rules that have closed on comment and are — are ready — are lined up for — for final rule shortly.
We also have two other rules that are in — that are currently in the pipeline in the spring agenda.
And it is part of a comprehensive approach. And I think that’s really important to reinforce, that there are — that there is a lot of work that needs to be done, and that’s a crucial part of it. But so too are investing in small meat packers and independent — -pendent packers, the seeds — seed liaison, and making sure that we’re giving farmers a voice in the — the patent process are other ways that we’re working on — working to take on this competition.
SENIOR ADMINISTRATION OFFICIAL: I can also add from the White House perspective that we would love to see — as I said, there is bipartisan interest in the ag competition space. We would love to see Congress act on that.
We are also, to be clear, ve- — very ready to play a strong defense here. And from the White House’s perspective, any successful omnibus agreement would have to maintain the status quo on no new riders. Thanks.
MODERATOR: Thanks, [senior administration official]. I’ll turn it over now to Molly Nagle.
Q Hi. Thanks so much for doing the call. I just wanted to ask one question of clarification on the housing portion of this.
So, obviously, the three websites are — are putting forth — forward new steps to make the fees more transparent and to make them clear to consumers. But just to be clear, there is no portion of this that’s cutting down on the fees across the board nationwide as a part of this announcement tomorrow, correct?
SENIOR ADMINISTRATION OFFICIAL: That’s right. As part of the — this is really about the — the announcement tomorrow is it really about transparency of these fees, which — which we, of course, think will have — will have the effect of — of cutting them down.
But in terms of the specific actions that we’re announcing tomorrow, it’s about transparency and — and giving consumers the opportunities to, you know, really effectively consu- — comparison shop.
MODERATOR: And I would just add that that is similar to our — the — what we had Ticketmaster and other ticketing companies agree to at a recent event at the White House.
And for our last question, I’ll turn it over to Akayla Gardner.
Q Hey, guys. I’m wondering if you guys could just clarify the blind spot that you mentioned earlier. How will this new merger (inaudible) sort of fill in those blind spots that you think is in the congressional law?
SENIOR ADMINISTRATION OFFICIAL: Thanks for the question. So, as I noted, as part of this process, we really heard from thousands and thousands of people, ranging from farmers to independent pharmacists to musicians, who all shared with the agencies, in particular, the ways in which mergers and consolidation over the last few decades have made it much more challenging to compete on a level playing field and to really compete on the merits so that whoever has the best idea is able to really come out on top.
And unfortunately, all too often, they shared with us the ways in which mergers have really undermined that free and fair competition.
And so, hearing directly from them and — and understanding some of this history was really important for us as we put together these guidelines and included details on, you know, mergers that hurt workers: the ways in which you could have serial acquisitions, where there can be a series of deals where no individual merger acquisition necessarily raises competition concerns, but, in the aggregate, that whole series can raise concerns.
We also noted in the guideline the way in which partial ownership and minority interest can also be a mechanism of control.
So, you know, we really lay out, in addition to some of the core guidelines, details around special settings where there are additional considerations that we as agencies need to keep in mind that we laid out in the document as well.
SENIOR ADMINISTRATION OFFICIAL: Yeah, and this is [senior administration official]. I would add that, you know, to build on what [senior administration official] said, that the most important question we can ask ourselves in evaluating a merger is: How does competition in this industry present itself and does the merger threaten that competition?
And what we’ve learned over time is that this industry is transformed, and our daily lives today are different than they were decades ago. It’s important to make sure that we’re updating our guidance to keep pace with those on-the-ground changes.
And so, for example, in many instances, the problem with a merger isn’t that — always that a company is buying a direct competitor, but it might be buying a company that threatens its dominance, either through a disintermediation or through technologies that might disrupt and displace its position.
And so, it’s really important that if that’s how competition presents itself in the year 2023, that we have guidelines that meet the needs of today’s economy.
MODERATOR: Thank you so much, [senior administration official] and [senior administration official].
That’s all the time we have for questions. If you have any follow-ups, please feel free to email me or the relevant agencies.
As noted at the top, this call is embargoed until 5:00 a.m. tomorrow. The speakers are speaking as “senior administration officials.” Thank you, everyone, for your time.