Greetings, fellow travelers.
2024 Mercatus Center Annual Antitrust Forum
This month, we released the proceedings document for our 2024 Mercatus Center Annual antitrust forum, featuring expert insights from former agency staff, legal practitioners, economists, and policy experts from the world of law & economics. In keeping with Chatham House rules, speakers’ names have been anonymized -- allowing for candid discussion and analysis of the current state of competition law, cutting-edge economic, legal and historical insights, and commentary on the enforcement approaches of the current Federal Trade Commission and Department Of Justice that you won’t find elsewhere. Accompanying our conference proceedings document is a policy brief from University of Pennsylvania professor Christopher Yoo, which provides a conceptual framework for policymakers for deciding between regulating economic competition through proscriptive civil law-style rules, or through more flexible laws.
FTC Noncompete Ban
This month, the FTC finalized its blanket federal ban on noncompete clauses in employment contracts by declaring them to be an “unfair method of competition” under the FTC Act Section 5. The agency’s authority to adopt substantive competition rules under Section 5 is highly dubious, and the new rule is likely to be struck down once it is challenged in court, as I noted in my recent Forbes column. I also discussed the issue on the Todd Feinburg show on WTIC radio and on the Lars Larson show.
This isn’t the first time that a Biden administration agency has claimed statutory authority to severely limit noncompetes. Last year, the National Labor Relations Board (NLRB) general counsel issued a controversial advisory opinion that all but the most narrowly tailored noncompete clauses violate the National Labor Relations Act. My colleague Satya Marar critiqued that view in Truth on the Market.
Although workers subject to such clauses might understandably find an outright ban appealing, its competitive implications, including whether noncompetes have net positive or negative consequences for innovation and consumer welfare, remain unclear. We should opt for a high bar based on solid economic evidence before we entirely proscribe certain private contractual employment arrangements using government force. Possible negative implications of a noncompete ban include reduced investment in worker training and professional development, less willingness by employers to share or make full use of trade secrets, and fewer employment opportunities. The competitive implications are also likely to differ dramatically across various industries and product and geographic markets. A blanket federal ban is a blunt tool, and the FTC is likely to draw sharp rebukes from judges for effectively attempting to override state legislatures in seeking to regulate noncompetes under competition law.
U.S. Steel & Nippon
The Biden administration plans to block the proposed acquisition of U.S. Steel by Japanese giant Nippon Steel, based on national security and (perhaps) antitrust grounds. However, evidence indicates that these concerns are likely to be unwarranted, and that blocking the deal would instead reduce U.S. competitiveness and hurt competition while undermining America’s relationship with a key allied nation, as I noted in Truth on the Market.
Robinson-Patman Act (RPA)
Reports of high revenues for some large grocery chains have prompted some representatives and senators to throw their support behind the enforcement agencies’ plans to revive enforcement of the Robinson-Patman Act against the chains. My colleague Satya Marar recently wrote for the Hill on how reviving this anti-consumer and protectionist statute would harm our country’s poorest, as it is likely to make our groceries more expensive. Satya has previously published a special study on the RPA and the potential consequences of reviving its enforcement across a range of industries.
Data Protection Legislation
Congress is considering a new bipartisan federal data protection bill that has some likelihood of making it into law. However, legislators should carefully weigh consumer privacy benefits against potential harm to consumers from increased business costs for business and reduced innovation, as I argue in Forbes.
World IP Day
This World IP Day, I spoke to IP Watchdog about the need for the United States to restore its global leadership in patent-driven innovation by restoring the presumption in favor of an injunction in the event of patent infringement, and to pass laws ending judge-made exemptions to patentable subject matter eligibility.
DOJ vs. Apple
My colleague Tracy Miller recently wrote about the Department Of Justice’s case against Apple for Discourse Magazine. He argues that although the case is likely to benefit some of Apple’s competitors, it’s also likely to harm consumers. I had previously analyzed the DOJ’s lawsuit in my Forbes column.
That’s all from us for this month. See you next time.