President Joe Biden has started his efforts to influence the American economy through executive actions.
In his bid to slash big businesses to encourage competition and fair market prices, Biden signed an antitrust executive order.
This has raised alarms in the ranks of big investors who were not yet recovered from the global taxation shock.
The executive order is one of the broadest actions he has taken since coming to power, which would empower more than twenty departments to regulate big corporations.
Big tech is most vulnerable to danger amid the antitrust laws, which could result in thousands of people losing their jobs.
Biden Coming to a Crossroads with Businesses: Not a Popular Approach
The aim of the antitrust laws, according to Biden, is “to combat the excessive concentration of industry.”
The debate of government involvement and intervention in the economy is not new. With the rise of a laissez-faire school of thought, voicing to leave the economic growth unattended, the government that attempts to regulate businesses too much often faces backlash from the key stakeholders.
As the executive order addresses a broad spectrum of marketplaces, both horizontally and vertically, the corporate heavyweights can come face-to-face anytime soon with the administration.
One of the biggest motives of any antitrust law is to reduce prices by eliminating monopolies. However, the antitrust laws in the past have backfired, ultimately increasing the prices rather than decreasing them.
Big Tech Regulation: Another Government-Business Tussle Boiling up
Biden’s antitrust executive order would allow the Federal Trade Commission (FTC) to scrutinize tech giants for any potential merger.
In the 21st century, when technology is contributing a majority of income to the United States GDP, any unilateral step to slash these big companies can backfire.
And this is not the first time that the government is seeking to make big tech accountable for their business practices.
Due to the sheer influence of these big giants, including Facebook, Apple, Google, and Amazon, on the US economy, most of the time, the efforts to break their monopolies end up in failure.
This is no surprise, considering that governments across the globe are heavily influenced by these business giants.
Biden’s executive action is targeted to “barring unfair methods of competition on internet marketplaces.”
Big tech is the single largest contributor to the global economy, as they impact a wide array of industries due to their sales model for advertisements.
For instance, if Facebook is regulated further, it would discourage small businesses from running their ads on the platform.
So, the antitrust lawsuit that supposedly aims to uplift small businesses could end up resulting in their lesser exposure to the audience.
The same goes for Amazon, which is the home of millions of small sellers, and any attempt to break it would ultimately ax the small business owners.
This executive order is also intended for safer data collection practices with strict surveillance regimes.
This could fuel up an Apple-Facebook digital feud, where Apple was already taking the social media giant through horns.
Biden Trying to go Big: Antitrust Executive Order is too Ambitious to Follow
The biggest complication in Biden antitrust lawsuit is the range of industry which it is about to target.
The Biden administration is trying to engage too many mafias at a time, which could be the administration’s chokehold.
For instance, the antitrust executive order will break monopolies in agriculture, transportation, healthcare, finance, and big tech sectors, ideally.
On paper, this may seem a fancy approach; however, it looks too ambitious a plan to implement.
This is true that markets across the broader spectrum have been concentrated by a few players in the United States.
For instance, four major airlines dominate the skies of the US, while only four beef packers constitute 80 percent of the industry.
The executive order, no doubt, would try to create a favorable playing field for smaller businesses, but this is an incremental process, which is beyond the scope of any single lawsuit.
The need is to address each and every industry separately with proper bureaucratic changes over time.
However, when going this route, the Biden administration must keep in mind that attempts to regulate the big corporations in any industry can create a job crisis in the country, with millions of people facing downward social mobility overnight.
This can also turn out to be an unpopular approach, especially in the wake of the reopening of the economy after COVID, where any such measure can trigger social unrest on a broader scale.