President Joe Biden will sign a comprehensive executive order designed to promote competition in various industries and labor markets in the United States, calling on regulators to take measures to reduce drug prices, strengthen the law enforcement of the merger of technology and banking, and give workers more jobs and jobs. The power to negotiate higher wages.
Although there is still a long way to go from the President’s directive to the final regulations, the President’s directive aims to address the sharp increase in industry consolidation over the past 20 years, which raises concerns that the largest companies are stifling competition and innovation.
The White House blamed the reduction in competition across the economy on increasing consumer prices for essentials such as prescription drugs, lowering workers’ wages, and dragging down growth and innovation.
The government said: “It is now estimated that the increase in prices and the decline in wages due to lack of competition have cost the median American household $5,000 a year.”
But the U.S. Chamber of Commerce condemned Biden’s actions.
Neil Bradley, executive vice president of business lobbying, said in a statement: “Today’s executive order is based on the false belief that our economy is over-concentrated and stagnant, and cannot produce what is needed to stimulate innovation. Private investment.” “This broad statement is out of touch with reality, because our economy has proven to be resilient and is still the envy of the world.”
The order includes 72 initiatives by more than a dozen federal agencies. Here are the details of some of the initiatives outlined in the order:
Restoring open internet rules
The Federal Communications Commission is required to restore net neutrality rules that prohibit Internet service providers from blocking or slowing down certain content or speeding up delivery. These rules were implemented during the presidency of Barack Obama, but they were revoked during the presidency of Donald Trump.
The order also calls on the FCC to prevent Internet providers from negotiating exclusive agreements with landlords, allowing tenants to choose only one Internet option, and limiting the high terminal fees that cable companies charge when consumers switch providers.
The Federal Trade Commission is required to establish rules for technology companies to collect data and to enact regulations prohibiting the “unfair competition methods” of the largest technology platforms in order to protect companies that rely on these companies to access customers.
Supervise bank mergers
The order accuses banking mergers of increasing consumer costs and restricting credit to small businesses, and calls on the Ministry of Justice and banking regulators to update bank merger guidelines to strengthen the review of transactions.
The Consumer Financial Protection Bureau is required to issue rules that allow consumers to download bank data and take it with them, making it easier for them to switch banks.
The order is aimed at areas where lack of competition will increase prices and reduce access to quality care, starting with prescription drug prices.
Biden’s order will call on federal health officials to work with states to develop plans to import medicines from Canada, where medicines are cheaper.
In some ways, the president’s plan echoes the policies put forward by former President Donald Trump a year ago.
Then, Canada rejected the proposal to allow Americans to import medicines, and neighboring countries in the north later adopted measures to restrict the distribution of medicines to protect their supplies from bulk sales across borders.
Biden has instructed the Department of Health and Human Services to issue a comprehensive plan within 45 days to cope with high drug prices.
This may lead Trump and some Democrats to make proposals that benchmark medicines against cheaper prices paid by countries with national health systems.
The drugmaker said the move would stifle innovation. Industry trade organizations, the American Pharmaceutical Research and Manufacturers Association, and the Biotechnology Innovation Organization did not immediately respond to requests for comment.
Biden will also urge the FTC to prevent drugmakers from paying their generic counterparts to delay entry into the market for lower-priced versions of drugs. This idea is part of pending legislation in the Senate and is consistent with Biden’s campaign promise last year.
The Accessible Medicine Association, a leading trade organization in the generic drug industry, said it looks forward to working with the Biden government to increase the adoption of low-cost generic drugs and biosimilars, “and correct the increasing number of government and payer policies that use high-cost brands and Not a generic or biosimilar competitor.”
The order stated that hospital consolidation has increased the cost of healthcare and reduced services in some communities, especially in rural areas. The executive order instructed the Department of Justice and the FTC to tighten the merger guidelines for hospital transactions. It also instructs HHS?? to support hospital price transparency rules and complete legislation to address unexpected hospital billing issues.
Benefit agricultural measures
The order requires new rules to be established to benefit farmers and ranchers. It instructs the Department of Agriculture to make it easier for dairy, pig, and poultry farms to sue large processors if they are paid too low or face retaliation.
It also asked the US Department of Agriculture to consider issuing new rules that define when meat can be labeled as “American products,” in order to restrict companies from labeling products made in the United States when they are processed domestically.
The measure also orders the Ministry of Agriculture to help farmers enter the market and obtain fair returns on goods, including supporting alternative food distribution systems such as farmers’ markets, and setting standards and labels so that consumers can choose to buy products that treat farmers fairly.
It encourages the FTC to prevent equipment manufacturers from restricting consumers’ ability to repair products in independent stores or themselves.
This move is designed to particularly benefit farmers, who face expensive maintenance costs from tractor manufacturers, who use proprietary tools and software to prevent third parties from working on the equipment.
The labor market element of the order focuses on restricting non-compete agreements that have become common in certain industries and restricting the movement of workers. The measure also requires updates to antitrust rules regarding companies that share wages and benefits information to avoid competing for workers.
It requires the FTC to remove occupational permit requirements that may set entry barriers for new job seekers in certain fields. Biden also reiterated his support for the pro-labor bill passed by the House of Representatives but stalled in the Senate, which will make it easier for workers to form unions.
Fight against airlines, freight
According to the White House, Biden is also focusing on the integration of the aviation industry, especially additional costs such as baggage, in-flight services and cancellations, which “frequently increase at the same time, indicating a lack of meaningful competitive pressure.” .
According to EO, the top 10 airlines collected US$35.2 billion in combined fees in 2018, compared with US$1.2 billion in 2007.
The order instructs the transportation department to ensure that these fees are transparent and refunded if services are not provided.
For railways currently dominated by only a few freight railway companies, this measure will require track owners to give way to passenger railways and treat other freight companies equally. The measure also addresses the freight that domestic manufacturers are currently forced to pay foreign companies.
Freight railroads and shipping trade groups objected to Biden’s order, saying that there is enough competition between their industries that the order will put them at a disadvantage.
John Butler, President and CEO of World Shipping, a trading group, said: “We urge everyone to make decisions based on the real facts of the situation, and then deal with temporary situations that cause long-term consequences by considering improperly The negative results of the council said in a statement.
The role of the institution
Biden’s order echoes the Obama administration’s order in 2016, which stated that in addition to government agencies responsible for antitrust enforcement, they can also play a role in protecting consumers, workers, and businesses from market forces in the economy.
However, unlike Biden’s order, Obama’s order does not instruct individual agencies to take specific actions, but instead requires them to propose their own plans.
The order is based on a report by the Council of Economic Advisors that outlines the effects of increased consolidation and decreased competition across the various sectors of the U.S. economy.
Since then, as economists and policy makers worry that increased concentration is damaging most economies and leading to income inequality, stagnant wages, and slow productivity growth, attention has been paid to the power of dominant companies. increase.
Although the drafting and implementation of new rules and regulations may take several months and are mainly handled by various departments and agencies, the White House has made it clear that the executive order is expected to cause major changes and have a significant impact on multiple industries.
This measure has promoted the government’s efforts to strengthen anti-monopoly law enforcement due to widespread criticism of law enforcement officers from the Department of Justice and the Federal Trade Commission for not doing enough to monitor mergers and anti-competitive behavior.
Last month, Biden unexpectedly appointed Columbia Law School professor Lina Khan to lead the FTC, placing one of the most prominent advocates in charge of setting a stronger antitrust agenda.
Biden has not nominated the head of the Department of Justice’s antitrust department, which leaves the department without political leadership five months after taking office because it is advancing a monopoly case against Alphabet Inc.’s Google and is filing a lawsuit to block Aon Plc. The proposed $30 billion acquisition of Willis Towers Watson Plc.
The White House’s efforts have further promoted a broad push to strengthen antitrust enforcement in Washington. In June, the bipartisan majority of the House Judiciary Committee passed six antitrust bills, mainly targeting the largest technology companies. These proposals represent an effort to amend the antitrust law and give more power to competition enforcers.