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Antitrust Astroturf Activism

Not too long ago, I pointed out that antitrust regulation is often gamed by special interests and rent-seekers. A recent story in The Wall Street Journal gives a fresh example. A group called the Free and Fair Markets Initiative (FFMI) has been advocating for antitrust actions against Amazon. Unsurprisingly, some of its funders are Amazon’s competitors:

Simon Property [a major shopping mall landlord] is fighting to keep shoppers who now prefer to buy what they need on Amazon; Walmart is competing with Amazon over retail sales; and Oracle is battling Amazon over a $10 billion Pentagon cloud-computing contract.

There is more:

The grass-roots support cited by the group was also not what it appeared to be. The labor union says it was listed as a member of the group without permission and says a document purporting to show that it gave permission has a forged signature. The Boston professor says the group, with his permission, ghost-wrote an op-ed for him about Amazon but that he didn’t know he would be named as a member. The California businessman was dead for months before his name was removed from the group’s website this year.

Free and Fair Markets, or FFMI, declined to reveal its funders or disclose if it has directors or a chief executive.

Oracle in particular has a history of using Washington to dispatch competitors. Back during the 1990s Microsoft case, for example, the company ran its own independent investigation against Microsoft that may have crossed some ethical boundaries.

It also turns out that a public relations firm, Marathon Strategies, runs FFMI. According to FFMI’s website, the group “works to raise awareness about troubling trends across the economic landscape that undermine competition and growth.” Despite this broad mission, nearly all of FFMI’s activity is aimed against a single company. That alone is a red flag for an astroturf group, as opposed to a natural grassroots group. Combined with everything else The Wall Street Journal uncovered, it is hard to conclude FFMI is anything else.

Which brings up an important concept for the current antitrust battle: the difference between pro-business and pro-market. I’ve made the distinction before in connection to other issues. FFMI, for all its anti-Amazon efforts, is a classic pro-business group. In particular, it is pro-Simon Property, pro-Walmart, pro-Oracle, and pro-its other clients, if any.

Competition and fairness would be better served by pro-market policies. These do not aim to help or harm individual businesses. Pro-market policies set up an ongoing, churning competitive process, in which companies compete, adapt, succeed, and often fail on the merits. Pro-business interests, by contrast, often seek a comfy set result, which incumbents would like to maintain for as long as they can.

Antitrust enforcement advocates often use morals and values language in explaining their positions. They see a government captured by corporate interests, and they’re not always wrong. But the solution to regulatory capture is not more regulation. Antitrust regulation, as practiced, falls rather short of the idealized theory of government relied on by most antitrust advocates. Moreover, the insincere ones like FFMI routinely adopt that same virtuous language as a cover story to hide behind. FFMI, for example, says it favors a level playing field, even as its actions try to tilt it against consumers’ wishes.

For more on how antitrust regulation often works against its own goals, see Wayne Crews’ and my recent paper. For more on why the best ways to fight rent-seeking are outside Washington, see Fred Smith’s and my paper “Virtuous Capitalism.”