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A new Executive Order signed by President Biden includes 72 initiatives instructing more than a dozen federal agencies, including the US Department of Justice and the Federal Trade Commission, to, according to the White House's Fact Sheet, "promptly tackle some of the most pressing competition problems across our economy." The Order sets up a first-of-its-kind White House Competition Counsel tasked with executing the Order, while "coordinat[ing] the federal government's response to the rising power of large corporations in the economy."
Coming on the heels of multiple legislative proposals to overhaul the US antitrust laws, Executive Order on Promoting Competition in the American Economy directs a number of government agencies to consider adopting rules and regulations to accomplish a plethora of competition-enhancing goals. For example, the Order asks that agencies implement rules to:
- Ban or limit "non-compete" agreements that restrict an employee's abilities to change jobs (§5(g));
- Support state / tribal programs aimed at lowering drug prices, such as programs to import lower-priced pharmaceuticals from Canada (§5(q));
- Address "unfair anticompetitive conduct or agreements in the prescription drug industries, such as agreements to delay the market entry of generic drugs or biosimilars," likely including "pay for delay" and similar agreements (§5(h)(iii));
- Consider whether it is necessary to revise the agencies' position on "the intersection of intellectual property and antitrust laws," including whether to revise the policy on remedies for standards-essential patents (§5(d));
- Prohibit internet providers from, among other things, imposing "unjust or unreasonable early-termination fees," require internet providers to fully disclose plan costs (in an effort to enable comparison shopping), and ban landlord-provider exclusivity agreements that require tenants to use only one Internet provider (§5(l));
- Address unfair restrictions by manufacturers on a purchaser's ability to have a third party repair goods (prevent manufacturers from controlling all repairs) (§5(h)(ii));
- Facilitate the portability of data so that customers can access their financial transaction data and more easily switch banks (§5(t)(i));
- Strengthen the US Department of Agriculture's tools to "stop the abusive practices of some meat processors" (§5(i));
- Use federal agencies' procurement and spending decisions to "promote greater competition" (§5(a)(ii)).
Additionally, the Order broadly encourages greater scrutiny of mergers (including advising the DOJ and FTC to review and consider revisions to the merger guidelines), and more vigorous enforcement of the antitrust laws in the following sectors:
- Agriculture (farming and meat producers)
- Internet services and technology
- Banking and consumer finance
What does it mean for you?
The Order is largely a compilation of directives that encourage various government agencies to enforce laws more vigorously against certain behaviors and consider implementing particular rules and regulations. It will take time to develop and implement the details on any new rules and policies. Indeed, the newly-established White House Competition Counsel's primary objective will be to make sure the Order's initiatives are carried out.
Nonetheless, businesses in the targeted industries should brace for scrutiny, and continue to watch closely for developments.
- From White & Case: "Analysis: FTC Encouraged to Ban or Limit Non-Compete Agreements in July 9, 2021 Executive Order; Breaks With Tradition, And Follows Trend of Heightened Antitrust Focus on Labor Markets"
- From White & Case: "What Does President Biden’s July 9, 2021 Executive Order on Competition Mean for the Pharma Industry?"
- From the White House: "Executive Order on Promoting Competition in the American Economy"
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