What Does Executive Order 14074 Mean For Your Business?

On March 24, 2022, the Biden Administration issued Executive Order 14074, officially titled "Promoting Competition in the American Economy."

This Executive Order is a comprehensive plan to address various economic and market concerns, aiming to foster competition, reduce barriers to entry, and ultimately benefit consumers and businesses alike. With a focus on antitrust measures and market fairness, the order addresses several key areas, including the technology sector, healthcare, and agriculture.

While the implications of this order are far-reaching, affecting various industries and sectors, its potential impact on businesses, particularly those operating in regulated markets or facing significant market concentration, cannot be overstated. Here, we delve into the specifics of Executive Order 14074, exploring its key provisions and how they might shape the business landscape.

Key Provisions of Executive Order 14074

Executive Order 14074 encompasses a wide range of initiatives and directives aimed at promoting competition and addressing market power imbalances. Some of the most significant provisions include:

Enhancing Antitrust Enforcement

The order directs federal agencies to strengthen antitrust enforcement, particularly in sectors where market concentration has led to reduced competition. This includes increased scrutiny of mergers and acquisitions, especially those involving large technology companies, to ensure they do not undermine competition or harm consumers.

It also calls for the modernization of antitrust tools and resources, ensuring that agencies have the necessary capabilities to identify and address anti-competitive behaviors effectively. This could involve the adoption of new analytical techniques, increased collaboration between agencies, and enhanced coordination with state and local authorities.

Promoting Competition in Technology Markets

Given the significant market power held by a few large technology companies, the order includes several provisions specifically targeting this sector. These include directives to:

• Prohibit or limit certain exclusive dealing practices that may limit competition.
• Ensure that large technology platforms provide fair and non-discriminatory access to their services for smaller businesses and developers.
• Explore the potential for data portability and interoperability requirements to reduce barriers to entry and promote competition.
• Address concerns around self-preferencing, where large platforms use their market power to favor their own services over those of competitors.

Strengthening Worker Power

The order also recognizes the importance of a strong labor market in promoting competition. It includes provisions to:

• Support the right of workers to organize and collectively bargain, which can lead to better wages, benefits, and working conditions.
• Encourage the adoption of pro-competition policies in labor markets, such as reducing barriers to entry for new businesses and promoting fair competition among employers.
• Address concerns around non-compete agreements, which can limit worker mobility and stifle innovation.

Improving Agricultural Markets

Recognizing the challenges faced by farmers and ranchers due to market concentration, the order includes provisions to:

• Strengthen enforcement of the Packers and Stockyards Act, which aims to ensure fair trade practices in the livestock, meat, and poultry industries.
• Promote transparency and fair practices in agricultural markets, including through the use of data and technology.
• Encourage the development of new market opportunities for farmers and ranchers, such as through the growth of local and regional food systems.

Promoting Competition in Healthcare

The healthcare sector is another area of focus for the order, which includes provisions to:

• Address high drug prices by exploring ways to promote competition in the pharmaceutical industry, including through the use of generic and biosimilar drugs.
• Encourage the development of value-based care models, which focus on improving patient outcomes rather than simply providing more services.
• Promote competition in healthcare markets by reducing barriers to entry for new providers and encouraging the use of health information technology to improve efficiency and reduce costs.

Impact on Businesses

The implications of Executive Order 14074 for businesses are significant and wide-ranging. While the order aims to promote competition and protect consumers, it also introduces new challenges and opportunities for businesses operating in affected sectors.

Enhanced Antitrust Scrutiny

With the order's focus on strengthening antitrust enforcement, businesses, particularly those involved in mergers and acquisitions, can expect increased scrutiny. This could lead to longer review periods, more stringent merger conditions, and potentially even the blocking of certain deals.

Businesses should therefore be prepared to demonstrate the pro-competitive benefits of their transactions and be ready to address any concerns raised by regulatory authorities. This may involve providing detailed information on market dynamics, consumer welfare impacts, and potential remedies to address any anti-competitive concerns.

Addressing Market Power

The order's provisions targeting large technology companies and other sectors with significant market power could have far-reaching implications. Businesses operating in these sectors may need to adapt their strategies to comply with new regulations and guidelines, such as those relating to data portability, interoperability, and fair access to services.

For example, large technology platforms may need to revise their business models to ensure they are not engaging in anti-competitive practices, such as self-preferencing or exclusive dealing. This could involve changes to their algorithms, platform policies, and even their revenue models.

Promoting Competition and Innovation

While the order introduces new challenges, it also presents opportunities for businesses to promote competition and innovation. By fostering a more level playing field, the order aims to encourage the entry of new businesses and the development of new technologies and services.

For instance, the provisions on data portability and interoperability could benefit smaller businesses by reducing barriers to entry and enabling them to compete more effectively with larger incumbents. Similarly, the focus on value-based care in healthcare could open up new opportunities for innovative providers to enter the market and deliver high-quality, cost-effective care.

Conclusion

Executive Order 14074 is a comprehensive and far-reaching initiative aimed at promoting competition and addressing market power imbalances. Its provisions have the potential to significantly impact businesses operating in affected sectors, introducing both challenges and opportunities.

As the order's provisions are implemented and further details emerge, businesses will need to stay informed and adapt their strategies accordingly. By understanding the implications of the order and staying engaged with the regulatory process, businesses can position themselves to navigate these changes effectively and capitalize on the opportunities they present.