The Problems with the White House Competition Council

Sometimes seemingly little things slip under the radar that have big implications. One of those this week was the third meeting of President Biden’s Competition Council, established by a July 9, 2021, Executive Order on Promoting Competition in the American Economy, ostensibly charged “to drive forward the Administration’s whole-of-government effort to promoting competition.”

Biden’s order and the pursuits undertaken in its name do not promote competition, but consolidate federal power over the economy, companies, and lives. The Council, composed of 10 cabinet members, has the wind at its back given the regulatory legislative enactments of the past three years.

This week’s summit on competition policy got little attention, but highlights how cross-governmental meta-regulation has become normalized. The targets at the moment are airlines, Internet services, pharmaceuticals, and, strangely enough, meatpacking.

Biden, for his part, used the occasion to repeat his demand that the “companies running gas stations” to “Bring down the prices you’re charging at the pump to reflect the cost you pay for the product. Do it now.”

A priority of the Council is to shift blame onto others for mangled marketplaces, supply chain chaos, and the dire financial straits inflicted on consumers by policy makers’ reactions to the pandemic—namely, the shutdowns, lockdowns, bailouts, and mandates already analyzed to death. At the same time, the Council is facilitating administration efforts to transform business and sectors into government/business “partnerships” that squeeze out free enterprise.

The Council’s primary function in the current setting is to cement the notion that someone other than Washington politicians are to blame for the nation’s economic peril, while at the same time inflicting new regulatory policies from which consumers and businesses will be unable to escape.

In reality, free competitive enterprise—undermined by much of the legislation and regulation since the pandemic—is a highly energized driver of transparency and punisher of shady pricing practices. The Council’s regulatory push in the name of these two values is substitute for them.

On airline turmoil, the White House readout for the Council meeting declares that the Department of Transportation “called them out” and has launched a “transparency dashboard” to pressure airlines to “cover hotels and meals” and provide free guaranteed rebooking. New rules are underway to “require airlines and online search sites to disclose up front—while you are shopping for the best fare—any fees to sit next to one’s kid, for baggage, and for changes or cancellations. This will stop airlines from hiding the true cost of a ticket, so that consumers can find the actual best deal.”

At the Federal Communications Commission, “similar rules” are being pursued to “require Internet companies to display a standardized ‘Broadband Nutrition Label’ that discloses their monthly prices, fees, and internet speeds—so customers can see which company is cheapest and companies will have to compete for business.”

Real transparency and consumer benefits would emerge from further freeing the sectors in question from three-letter agency domination. Biden’s “transparency” mandates allow Washington to avoid having to liberalize the sectors in question.

Not only is the administration throwing its weight around at airlines and telecommunications companies. We are reminded that the Department of Justice and Federal Trade Commission are “Strengthening enforcement against illegal mergers” by “working to finalize revisions to the merger guidelines—the framework for their analysis of mergers under the antitrust laws.”

The Department of Agriculture “will soon announce the distribution of millions in funding to help expand and diversify meat and poultry processing capacity.” Note that it is not just big business being seduced or pressured into partnerships with the federal government.

Much of what we see here is classic deflection. Biden is himself the Edward Scissorhands of genuine transparency, having “modernized” regulatory disclosure such that we get little of it anymore. Among much else, Fiscal Year 2023 will mark four years without a mandatory Office of Management and Budget report to congress on the costs and benefits of the federal regulatory enterprise.

What Biden’s misnamed “competition” mandates signal is an intent to never deregulate further. Incumbents are at risk of being enlisted as gatekeepers protecting regulatory fiefdoms in exchange for protection from competition.

In the actual pursuit of free and liberalized markets, Biden’s “nutrition labeling” provisions interfere with ordinary and sometimes beneficially confidential trade or business practices. As long as consumers are getting the speed and services contracted for, there is no public policy issue at hand.

These forced disclosures are inferior alternatives to competition. Markets produce desired products and services, but they also produce relevant true information about rates and prices and add-ons. Disclosure and transparency exist in a continuum from absolute non-transparency and secrecy to full-disclosure of network and pricing practices. Where we “belong” on the continuum shifts continually with every new drone corridor, fiber deployment, wireless startup, merger, content deal, undigested meal—the list is endless.  Users should and can pay for varying amounts of disclosure or tiered access as they see fit. Competitive pressures between the businesses in question, plus demands by investors and shareholders, advertisers and Wall Street also impel disclosure improvements.

Transparency regarding particular mundane practices becomes increasingly irrelevant in a world of torrential competitive pressures to disclose useful information. The proper approach is to foster settings in which everything from flights to Internet speeds are so redundant and instantaneous and so supremely tailored and flush with wealth that disclosure doesn’t matter. Beyond that, the only need is that providers of goods and services adhere to any contract or promise given to users.  

The Competition Council’s summit claims to deliver on the President’s call to action to reduce or eliminate unfair fees that Americans shouldn’t have to pay.” Ironically, a lot of federal shenanigans of the past three years, costing multiple trillions of dollars, fall into this category.