Reed Showalter argues that the suggestion that antitrust can be ringfenced from democracy or the democratic process is erroneous. Antitrust is fundamentally a body of law designed to meet citizens’ basic needs, sustain the marketplace of ideas, and protect democracy and the rule of law.
This article is the final contribution to a symposium that explores the relationship between democracy and antitrust. In theory, Congress passes laws, the antitrust agencies implement them through rules and policies, and the courts assure these rules and policies accord with the relevant statutes and Constitution. In practice, Congress is catatonic, the agencies are commonly left to reinterpret the means and ends implied in decades old laws and apply them to an entirely different world, and the courts have historically shown their own willingness to interpret and reinterpret the meaning of the laws, belying the impression that there is always an obvious and objective singular understanding and application of the antitrust laws. Can the agencies make the case for reinterpretation by testing the limits of their rulemaking? Is that bad enforcement or a legitimate form of governance that acknowledges that the creation of new rules and interpretation of old laws are a messy and tortuous process? Often lost in all of this is a meaningful connection between policy and public opinion. Is there a legitimate place for more direct public engagement with antitrust, and what would that look like? Commentators often pit the desires of the public against the expertise of the government bureaucracy. What is the role—and democratic limit—of bureaucrats in setting the antitrust agenda and its goals? You can read the symposium articles from Barak Orbach, Sean Sullivan, Erik Peinert, Yunsieg Kim, and Reed Showalter as they are published here.
Whether antitrust can be democratic is, from the outset, a mis-framing of the relationship. Being free from economic domination is an essential part of a democratic society.
Democracy requires broad and vigorous protections of civil liberties. These liberties are at risk when individual actors gain too much power. There are explicit constitutional provisions and long-standing canons of law that provide checks and balances against the agglomeration of power in the political and civil spheres. But just as important to democracy is the fundamental freedom of action that people have in their economic life. The antitrust and antimonopoly laws are quasi-constitutional in this way. They protect the freedom of a person to make their own choices absent domineering and bullying by corporate power.
There are versions of antitrust enforcement that are atrophied to the level of a tool only: a speedbump regulatory exercise forgotten in the background, or the cudgel of an authoritarian looking to punish their corporate enemies. But these are not antitrust in any true sense. They do not actually disperse power. If anything, they consolidate it. Calling this antitrust is inaccurate, almost oxymoronic. When we speak of antitrust we must speak of it as it was conceived.
The original antitrust laws are written with a broad mandate. The Supreme Court described them as “a comprehensive charter for economic liberty” in Northern Pacific R. Co. and the “Magna Carta of free enterprise” in Topco Assocs., Inc. And much of the reason for this breadth and comprehensiveness is that the antitrust laws, to fulfill their mandate as protector of democratic freedom in people’s economic lives, can, should, and must respond to the ways in which people are facing domination by economic power at the times that they are experiencing it.
There are three major categories of economic power that matter for a person’s experience of democratic society.
Basics of life
The first is the kitchen table basics of life. How can a person go to work and earn a fair wage for that work? Scholars and practitioners have done excellent work in recent years restoring the function of antitrust as a protector of labor from the monopsony power of firms who can use their market power to curtail wages, benefits, and worker movement. When non-competes, predatory apprenticeship programs, or arbitrary power over workers’ schedules and conditions emerge from concentrated power, the antitrust laws must be able to address them. Some of these issues are similar to the types of abuses that may have been contemplated when the antitrust laws were first passed, but they are certainly distinct and modern enough that the drafters would not have contemplated them in their precise form.
Likewise, over the last few years Americans have experienced steep increases in the cost of housing that far exceed any gains they have made in wages. Anticompetitive pricing algorithms are estimated to have added about $70 per month to rent in American cities—roughly $3.8 billion to renters in 2023. A roof over your head is an essential part of a democracy. The Department of Justice’s case against RealPage and several of the corporate landlords for allegedly colluding to raise rents is a response and a fulfillment of this democratic need.
In health care, people face rising costs as an obvious consequence of the concentration and vertical integration of the American healthcare system. Health care spending in the United States was $13,542 per capita in 2023—about twice as much as comparably wealthy OECD countries. Market concentration contributes to these costs in several ways. Large payers control increasing portions of the market. They integrate everything from hospitals and specialty care to pharmacy services and the electronic interchange that allows the medical system to transact and approve prescription drugs. Two of the top nine largest companies in the world by revenue are healthcare companies—UnitedHealth Group and CVS Health—according to Fortune’s Global 500. And with this dominance, healthcare companies have denied more claims and closed more hospitals. People need the freedom to get medical care that does not bankrupt them and their family. Enforcement against hospital consolidation, against payer-provider consolidation, against the platformization of health care and its preclusion of smaller rivals and innovation has happened in fits and starts. But the public call for it is impossible to ignore. How can we expect people to believe in the legitimacy of a system which allows these markets to persist as they are?
Likewise with food and groceries, people regularly face explosions in cost of foods like eggs and meat that are caused or made worse by the consolidation of production. Consolidation in the distribution of food from wholesalers and distributors to grocery stores has made room for unfair practices like extractive slotting fees, surprise fees like manufacturer chargebacks, and kickback arrangements. At the same time, farmers and ranchers now receive about 15.9 cents of the food dollar: the portion of each dollar spent on food that goes to the farmers as opposed to processors, wholesalers, or retailers. This figure is down from about 41 cents in 1950. Meanwhile, grocery retailer revenues reached 7% over total costs in early 2023, up one percentage point since 2021 and 1.5% since 2015. Rising costs, in part from higher markups from further down the food supply chain, have contributed to food precarity among Americans. About 13.5% of U.S. households—an estimated 18.0 million—were food insecure at some time during 2023. Few social ills contribute to fragile governments and democratic failure as much as food insecurity.
These necessities as well as other staples determine much of how a person goes through the world experiencing themselves as free or not free. A person who is forced into homelessness, or bankrupted by medical costs, or unable to afford three square meals for themselves or their children is not free in a meaningful sense from oppression, from decisions being made for them by others. Antitrust and fair market enforcement are essential in preserving this base mechanic of a functioning democracy.
Information concentration
The second important category for democratic solvency is the marketplace of ideas, where citizens can freely exchange the information necessary to maintain a well-informed and empowered public. The Constitution protects the freedoms of the press, of assembly, and speech from government restraint. But this does not alone guarantee the open exchange and deliberation of conflicting ideas. If media and the platforms on which public discussion takes place are controlled by a few institutions, people’s capacity to speak is necessarily intermediated or even determined by the preferences of a few institutions.
The media market as a whole has a wide number of participants, including film and television, newspapers, broadcast journalism, radio, social media, and online information retrieval. However, looking more closely, each of those markets individually is dominated by a few players. The recent example of cable networks cancelling late night talk show hosts, potentially under political pressure, illustrates the importance of this point. In 1983, 50 companies controlled 90% of broadcast media; today that number is five. When media markets have many participants, losing one or two voices looks more like editorializing. When those markets are controlled by just a few players, a decision to slant coverage or alter the editorial voice, either for internal logic or due to outside political pressure, looks a lot more like control over public speech.
Even when these decisions are not even remotely related to the censorship of disfavored views, the mere fact that a small group of actors sets the terms of what information enters the public sphere creates something of a sameness tax on public discourse. Social media is a useful example here. When an algorithm is the primary determinant of whether a post is viewed or consumed, there are structural incentives toward creating more content that fits those algorithms’ predilections, and against creating content which does not. Recent reporting suggests something similar happens in music on Spotify, where the audio platform’s recommendation algorithm has coalesced the most popular and promoted music around similar tropes, decreasing individuality and harming smaller and more innovative artists. Thus the consolidation of public information markets impoverishes the inputs to creative thought and life even without engaging in the explicit or implicit censorship of ideas.
Antitrust enforcers have focused heavily on consolidation of information and media markets in recent years in part for this reason. The Federal Trade Commission’s enforcement against social media consolidation by Facebook, the Department of Justice’s enforcement against the Simon & Schuster-Penguin merger in books, and enforcement against Apple and Google for the monopolization of various markets for information consumption and disbursement are critical examples. The antitrust laws have shown themselves already flexible and appropriate for these nontraditional markets.
But enforcement of broader antimonopoly authorities is also essential to preserving the vibrancy of these markets. The Federal Communication Commission’s ability to evaluate media consolidation under its purview with the public interest standard has considered this in the past, and for the sake of its mandate and for the health of democracy should continue to consider it more vigorously in the future.
Antitrust’s direct relationship to democracy
Third and finally, there is a direct relationship of concentrated economic power to democratic governance and the rule of law. In the floor debates leading up to the passage of the founding U.S. antitrust law in 1890, Senator John Sherman, who lent his name to act, said, “if we would not tolerate a king, neither should we tolerate a tyrant of trade over our markets.” However, in many cases there is not so neat a distinction between these two. We know for example that as industries become more concentrated they spend more on lobbying. Likewise, mergers tend to lead to increased lobbying. We know that the results of legislative change more often reflect the will of businesses than the popular will, and we know that the long trend of American political life has been to elevate and prioritize the explicit rights of money as political speech and action.
Against this backdrop, consolidation and the accumulation of monopoly power is harder to distinguish from the political sphere. The more explicitly that economic power is the currency of political speech, the more clear it becomes that antitrust is an overtly political act. It is no accident that the CEOs of the largest companies in the world were in the front row of President Donald Trump’s inauguration and have recently appeared at meetings and convenings at the White House with lavish gifts and promises to the president’s agenda. And perhaps more overtly on the antitrust side, the bleeding of these lines surrounding the enforcement decisions by the major antitrust agencies makes clear that at least on the market side there are no illusions about how closely intertwined economic power is with political influence.
Consolidation creates the ground on which authoritarian power can be wielded. In many other cases, authoritarian governments create this ground by nationalizing and consolidating economic power themselves. However, if this economic power is already concentrated in the private sphere and is willing to go along with an anti-democratic impulse, there is no need for state control. Preventing and disrupting this level of concentration is therefore a prophylactic democratic act.
In these ways, it is not quite appropriate to ask just whether antitrust can be made more democratic. We should be asking instead whether modern democracy can long exist without something like antitrust.
Author Disclosure: Reed Showalter is a former attorney for the Federal Trade Commission, counsel to the Department of Justice, and senior policy advisor for the White House National Economic Council. He worked on behalf of the government plaintiffs in some of the cases mentioned in this article.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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