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While federal antitrust enforcement agencies typically focus on ensuring competitive markets and keeping prices of services and goods fair for consumers, the Biden administration is turning its attention to the impact of mergers and acquisitions on labor.
Tim Wu, special assistant to the president for technology and competition policy, said industry consolidation has increased the power of corporate employers, making it harder for employees to bargain for higher wages and better working conditions. President Joe Biden wants regulators to give more attention to the impact of mergers on labor, Wu said.
Wu was speaking at the Federal Trade Commission (FTC) and Department of Justice's (DOJ) recent workshop "Making Competition Work: Promoting Competition in Labor Markets," which sought to answer how the two antitrust enforcement agencies could better gauge and assess the impact of businesses' anti-competitive actions such as unlawful mergers on employees.
"We are in the midst of what really does seem to be an important, historic moment for this country's economy and for the ongoing story of American antitrust," Wu said. "We live in a time where the president and we in the White House feel an acute popular demand that more be done to control market power, more be done to make the economy feel fair."
Wu is President Biden's top antitrust adviser who helped author Biden's executive order (EO) on promoting competition in the American economy. Wu said during the workshop that "the labor side of antitrust is certainly an area where the president has strong personal views." Wu is also a Columbia University law professor.
In the EO issued in July, Biden called upon the FTC and DOJ to enforce antitrust laws to ban excessive industry concentration, the abuses of market power and the harmful effects of monopolies and monopsonies on labor, Wu said. While a monopoly is when a business is the only producer of a good or service, a monopsony is when a business is the only purchaser of a good or service.
Antitrust focus areas
Wu identified merger reviews as one area needing focus, noting that for "too long merger review did not focus enough on the effects on workers."
Heather Boushey, a member of Biden's Council of Economic Advisers who spoke in a later workshop session, said 60% of labor markets are highly concentrated in the U.S. Boushey said hospital mergers provide a prime example of the negative impacts of mergers on workers. "As hospitals have merged, not only have consumers faced more limited choices in where to get their medical care, but nurses, doctors and other healthcare professionals have fewer employment options," she said.
Tim WuSpecial assistant to the president
The FTC and DOJ are currently reconsidering old merger guidelines to reflect the current economy. Wu said he hopes the FTC and DOJ strongly consider labor markets and merger effects on competition for jobs in the new guidelines.
Wu also suggested focusing on the gig economy. He described the gig economy as "complex" and said some of the contracts that avoid classifying gig workers as employees should be carefully examined for legality under the antitrust laws.
"The antitrust law has retained its relevance over the years by being dynamic, by having some awareness of where we are and what is changing from a business perspective, but also where the will of the country is," Wu said. "I think it's part of a healthy country, part of a healthy dialogue, to reconsider whether we've made mistakes and reconsider whether we need to be headed in different directions."
Federal agencies want help identifying anti-competitive conduct
Biden's EO encouraged cooperation among federal agencies with overlapping jurisdiction when it comes to policing anti-competitive conduct and merger oversight.
During the workshop, Jack Mellyn, attorney adviser for competition policy and advocacy at the DOJ, asked panelists such as Raj Nayak, senior adviser at the Department of Labor (DOL), how the DOJ and FTC as antitrust enforcement agencies could be more helpful to peer agencies. Nayak said training and collaboration on areas that the DOL should be looking at while assessing cases for potential anti-competitive behavior is crucial.
"Establishing those relationships, having some formal liaisons and having basic-level training so we can identify places where it's not just a wage-hour violation or OSHA problem, but might be something that's of interest to [the DOJ], would be really important," he said.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.