5 Key Takeaways From President Biden's Executive Order 14035

On January 12, 2022, President Joe Biden signed Executive Order 14035, titled "Strengthening the Nation's Competition Policy and Law Enforcement," aiming to address anti-competitive practices and promote fair competition in the American economy. This executive order builds upon the previous administration's efforts to enhance competition and curb the power of dominant tech platforms. The order's focus on competition policy and antitrust enforcement has significant implications for various industries and sectors, including technology, healthcare, and financial services.

1. Empowering Competition Policy and Enforcement

Executive Order 14035 places a strong emphasis on revitalizing competition policy and strengthening antitrust enforcement. The order directs the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to take a more proactive approach in identifying and challenging anti-competitive behaviors. It encourages these agencies to prioritize merger reviews, particularly in industries where a few dominant players hold significant market power.

One of the key directives is the establishment of a competition advocacy group within the FTC. This group will be tasked with promoting competition across various sectors and industries, ensuring that businesses and consumers have access to a wide range of choices and fair prices. Additionally, the order calls for increased collaboration between federal and state antitrust authorities to enhance the effectiveness of enforcement efforts.

Market Concentration and Consumer Welfare

A key concern addressed by the executive order is the growing market concentration in certain industries. President Biden emphasizes the negative impact of excessive market power on consumer welfare, innovation, and economic growth. The order instructs agencies to prioritize investigating and addressing practices that limit competition, such as exclusionary conduct, price fixing, and other forms of collusion.

By setting specific market concentration thresholds, the order provides a clear framework for agencies to identify and address industries where competition may be at risk. This data-driven approach aims to ensure that consumers benefit from a vibrant and competitive marketplace.

2. Enhancing Transparency and Consumer Protection

President Biden’s executive order also emphasizes the importance of transparency and consumer protection in promoting fair competition. It directs agencies to improve the transparency of their processes, including the development of clear guidelines for businesses to understand the expectations and requirements of competition law.

Furthermore, the order calls for enhanced consumer protection measures. This includes strengthening consumer privacy rights, particularly in the digital age, where vast amounts of personal data are collected and used by tech platforms. The FTC is tasked with developing robust privacy and data security standards to safeguard consumer information and prevent the misuse of personal data.

Data Privacy and Consumer Empowerment

The executive order recognizes the critical role of data privacy in fostering a competitive marketplace. It emphasizes the need for consumers to have control over their personal information and for businesses to be transparent about their data collection and usage practices. By empowering consumers with knowledge and control over their data, the order aims to create a more level playing field and promote innovation.

In addition, the order directs the FTC to explore the use of consumer data rights as a tool for promoting competition. This includes investigating the potential for consumers to have greater control over their data, such as the ability to easily transfer their data between service providers, a concept known as "data portability."

3. Promoting Innovation and Small Business Growth

Executive Order 14035 aims to create an environment that fosters innovation and supports the growth of small businesses. The order recognizes that a vibrant and competitive marketplace is essential for driving economic growth and creating job opportunities.

To achieve this, the order directs agencies to prioritize the review of mergers and acquisitions that may harm innovation and limit the entry of new competitors. It encourages agencies to consider the impact of mergers on small businesses and startups, ensuring that they have the opportunity to thrive and compete in the market.

Startup Ecosystem and Access to Capital

The executive order acknowledges the vital role of startups and small businesses in driving innovation and creating high-quality jobs. It calls for the development of policies and programs that support the startup ecosystem, including improving access to capital and reducing barriers to entry.

Additionally, the order instructs agencies to examine the impact of anti-competitive practices on access to capital for small businesses. By addressing any barriers that limit their ability to secure funding, the order aims to level the playing field and promote a more inclusive business environment.

4. Addressing Worker Power and Wage Suppression

A unique aspect of Executive Order 14035 is its focus on the impact of anti-competitive practices on workers. The order recognizes that excessive market power can lead to wage suppression and limit workers’ ability to negotiate better employment terms.

To address this, the order directs agencies to consider the impact of mergers and acquisitions on worker wages and employment conditions. It encourages agencies to examine the potential for wage suppression and the loss of worker bargaining power as a result of consolidation.

Employee Mobility and Collective Bargaining

The executive order emphasizes the importance of employee mobility and collective bargaining in promoting fair competition. It calls for agencies to investigate and address practices that limit worker mobility, such as non-compete agreements and other restrictive employment contracts.

By ensuring that workers have the freedom to move between employers and engage in collective bargaining, the order aims to create a more dynamic and competitive labor market. This, in turn, can lead to improved working conditions, higher wages, and a more resilient economy.

5. International Cooperation and Competition

Executive Order 14035 recognizes the global nature of competition and the need for international cooperation. The order directs agencies to collaborate with their international counterparts to address anti-competitive practices that transcend national boundaries.

This includes working with foreign competition authorities to share information, investigate cross-border anti-competitive behaviors, and harmonize competition policies. By fostering international cooperation, the order aims to create a level playing field for American businesses and ensure that U.S. interests are protected in the global marketplace.

Global Market Access and Standards

The executive order emphasizes the importance of maintaining fair and open markets for American businesses. It directs agencies to prioritize the review of mergers and acquisitions that may impact U.S. companies’ access to global markets. This includes examining practices that may create barriers to entry or limit the ability of U.S. firms to compete internationally.

Additionally, the order calls for the development of policies that promote international standards for competition and consumer protection. By working with international partners, the U.S. can ensure that global markets remain competitive and that American businesses can thrive in a fair and transparent environment.