Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy

Overview

Purpose and Intent

Executive Order 13725, issued by President Barack Obama on April 15, 2016, aims to increase competition and enhance consumer and worker information to foster economic growth in the United States. This order seeks to address unhealthy business practices like unlawful collusion, price fixing, and anticompetitive mergers that weaken the economy's competitive foundation. By promoting fair markets and transparent information, the order aligns with broader national priorities, such as affordable healthcare, energy independence, and access to broadband.

Collaboration Across Government

One of the central themes of EO 13725 is emphasizing the collective responsibility of federal agencies to foster competitive markets. The order mandates all executive departments and agencies with relevant authority to identify ways to promote competition, ensure consumer and worker access to critical information, and eliminate regulations that unnecessarily restrict competition. By encouraging collaboration, the order targets a holistic approach to correcting market inefficiencies and fostering an environment conducive to innovation and new business ventures.

Strategic Implementation

This executive order goes beyond nominal policy declaration by setting a clear timeline for actionable steps. Agencies are required to submit initial plans and continued progress reports on their efforts to identify bottlenecks to competition and provide strategic recommendations for eliminating these barriers. This structured timeline suggests a long-term commitment and accountability, ensuring that the efforts to increase competition are sustained beyond the initial order's issuance.

Legal and Policy Implications

Existing Legal Framework

EO 13725 is grounded in existing antitrust laws and frameworks, chiefly enforced by the Department of Justice (DOJ) and the Federal Trade Commission (FTC). By reinforcing the roles of these entities and urging all regulatory bodies to incorporate pro-competitive practices into their policy remit, the order amplifies existing legal mandates aimed at curbing anticompetitive behavior. While it does not introduce new statutory mandates, it reaffirms the existing legal standards under the Sherman Act and the Clayton Act.

Encouragement for Independent Agencies

Although it cannot impose mandates upon them, EO 13725 strongly encourages independent agencies to comply with its pro-competition standards. Such language underscores the executive branch's recognition of the critical role these independent bodies play in regulating industries where anticompetitive concerns are prevalent, like telecommunications and finance.

Potential Policy Shifts

Politically, the EO signals a shift towards more active government oversight in enhancing market competition. By calling upon agencies to revisit their current regulatory frameworks and remove unnecessary barriers, this order implicitly invites a policy reevaluation in various sectors, which might lead to new rule-making procedures adhering to this competitive ethos.

Who Benefits

Consumers

Primarily, consumers stand to benefit from increased competition through greater product choices, reduced prices, and improved service quality. By emphasizing consumer access to information, EO 13725 seeks to empower individuals to make informed purchasing decisions, thus driving demand for better offerings.

Small Businesses and Startups

The order also favors small enterprises and new market entrants who often struggle against established players with significant market share. By identifying and eliminating barriers to entry, EO 13725 aims to democratize market access, giving smaller businesses a fairer chance to compete and succeed.

Workers

Workers benefit indirectly as well. By targeting collusive behaviors like wage setting and anticompetitive conduct in input markets, the order creates an environment where labor competition thrives, potentially leading to better wages and more lucrative job opportunities.

Healthcare Sector

With a nod towards healthcare affordability, the order implies benefits for this sector, which has long been plagued by opaque pricing and monopolistic tendencies. Better competition could drive down costs, benefiting both consumers and reform-minded healthcare providers.

Technology and Broadband Access

The EO specifically highlights the necessity of competitive broadband access, suggesting benefits for technology consumers and startups in this field. Broader access to affordable broadband can support digital entrepreneurs and facilitate greater public inclusion in the digital economy.

Who Suffers

Large Corporations with Significant Market Share

Firms with dominant market positions could face increased scrutiny and regulatory intervention, potentially affecting their profit margins. These enterprises may need to pivot their strategies to avoid perceived anticompetitive behaviors.

Incumbents in Exclusionary Practices

Businesses reliant on exclusionary practices or regulations that create high barriers to entry could suffer as these protections diminish. Companies may face challenges adapting to new competitive pressures if these practices are curtailed.

Industries with High Regulation

High-regulation industries, such as utilities or telecommunications, might experience increased pressure to innovate and operate more transparently, potentially facing operational hurdles as they adjust to new policies.

Non-Compliant Firms

Firms lax in compliance with existing antitrust laws may face tougher enforcement actions. This order empowers agencies to refer questionable activities to DOJ and FTC, thus increasing the risk of litigation and penalties.

Establishment Interests in Labor Markets

Entities benefiting from suppressed wages or collusive labor market practices could find themselves disadvantaged by reforms promoting fairer wage competition. This shift may generate resistance from industries accustomed to unilateral wage-setting practices.

Historical Context

Continuation of Antitrust Tradition

EO 13725 aligns with a historical commitment to antitrust enforcement reflecting Progressive Era principles. By explicitly addressing monopolistic and anticompetitive practices, the order reasserts governmental vigilance over fair competition.

Obama Administration Priorities

Antitrust and market fairness have been cornerstones of President Obama's broader economic policy aimed at promoting equality and shared prosperity. This EO mirrors efforts seen in preceding years, reinforcing policy priorities that seek to invigorate stagnant market segments.

Antitrust Policy Evolution

The timing of this order further reflects a growing awareness of increasing market consolidation, particularly within the tech industry and traditional sectors like healthcare—a pertinent issue given the backdrop of shifting global economic dynamics.

Legacy and Future Implications

EO 13725 potentially sets a groundwork for future administrations to prioritize antitrust enforcement, emphasizing executive branch commitment to sustained economic competitiveness. Any future policy redirections would likely need to consider the precedents set forth here.

Historical Precedents

This order echoes past presidential endeavors to regulate economic fairness, invoking comparisons to Theodore Roosevelt's "trust-busting" legacy, situating itself within a long-standing American narrative of market vigilance and consumer protection.

Potential Controversies or Challenges

Enforcement Challenges

A key controversy lies in the practical challenges of adequately enforcing these mandates across disparate regulatory environments. Agencies may face capacity limitations or conflicting interests, potentially diluting the order's intended impacts.

Political Opposition

Predictably, the order faced pushback from political opponents and interest groups advocating smaller government roles. Critics argue that increased regulation impairs market efficiency by imposing government insistence over free-market dynamics.

Judicial Review

There exists the potential for substantial legal challenges concerning the order's interpretation and implementation. Legal debates might focus on the boundaries of the executive's role in shaping market regulations, a recurring theme in U.S. jurisprudence.

Congressional Resistance

Should congressional skepticism grow, efforts to enact supportive legislation could face stagnation. Broader economic or political shifts could render Congress a potential bottleneck to comprehensive implementation.

Stakeholder Concerns

The ambitious timelines and collaborative requirements asserted by this EO also risk logistical hiccups. Agencies must balance internal objectives with broader pro-competition mandates, demanding robust inter-agency coordination to avert policy paralysis.