Associate Attorney General Vanita Gupta Delivers Remarks at Georgetown Law’s 15th Annual Global Antitrust Enforcement Symposium

1 month ago
AMERICA NEWS NOW

Remarks as Prepared

Thank you for that kind introduction and for inviting me to speak at the 15th Annual Global Antitrust Enforcement Symposium hosted by Georgetown Law School. I bring greetings from the Attorney General.

As you may know, the Attorney General has said that antitrust law was his “first love in law school.” In defining the Justice Department’s top priorities, the Attorney General has placed reinvigorating antitrust enforcement at the center of the department’s focus on “Ensuring Economic Opportunity and Fairness.”

As the Associate Attorney General, I have the privilege of supervising some of the core litigating divisions of the department – the Antitrust Division, Civil Division, Civil Rights Division, Environment & Natural Resources Division and Tax Division – as well as the department’s grantmaking components that work closely with state and local jurisdictions to support criminal justice issues, victims services and the prevention of violence against women. It is a portfolio that touches upon a wide range of issues: everything from voting rights and police practices to competition and consumer protection; as well as efforts to ensure that we improve the quality of indigent defense and enhance civil legal representation for low-income litigants.

I am excited to be overseeing the Antitrust Division at this dynamic time in antitrust. What was once regarded as a narrow, highly technical field has become an important part of our national dialogue. The concentration of economic power is on the minds of members of Congress and people across America. It has captured headlines and the attention of governments around the world. What explains this renewed interest in antitrust? I think it’s the realization that robust antitrust enforcement is critically important for advancing economic justice. As President Biden said in his recent Executive Order on Competition, “the American promise of a broad and sustained prosperity depends on an open and competitive economy.” 

I have spent my entire career pursuing justice for the most vulnerable among us, including communities of color, immigrants and refugees, victims of violence and people who are incarcerated. I believe we are all better off when our country lives up to its promise of liberty and justice for all. When we right our past wrongs. When we pursue fairness and due process.

That is why it is so important that the department pursue economic justice through vigorous antitrust enforcement. Too often, powerful companies exploit consumers and tilt the playing field in favor of the already powerful. But everyone deserves to benefit from a free, fair and competitive economy. That includes anyone who buys beef, pork, chicken, tuna or dairy; workers who haven’t had a raise or want better working conditions; and families navigating health care or insurance markets. Competition benefits consumers, workers, entrepreneurs and innovators. Competition benefits everyone.

Unlawful monopolies only benefit monopolists. A lack of competition means fewer new products and higher prices. It means the owners of powerful firms make more without having to grow the size of the pie for anyone else. As the President’s Executive Order explained, weak competition “den[ies] Americans the benefits of an open economy and widen[s] racial, income, and wealth inequality.” I believe our country can do better.

The department’s antitrust enforcement efforts prevent and restrain the abuse of market power by dominant corporations, resulting in more choice, more products in people’s hands and more money in their wallets. Robust competition grows the size of the pie for everyone.

We therefore welcome Congress’ interest in providing new tools and resources for antitrust enforcement. The department also stands ready to work with other federal agencies in implementing the President’s Executive Order on Competition and in advancing sound competition policy more generally. But we recognize that antitrust policy is not a solution for all of the economic and social issues facing us today. That is why we must build strong partnerships with other federal agencies to combine competition policy with a whole-of-government approach to building a more fair and inclusive economy.     

This work is urgently needed. In many industries, consolidation is greater now than it was even just 20 years ago. For example, today, dominant health systems can approach 50% control of a relevant local or regional market. The largest shipping alliances control 80% of the market. The four largest beef packers have a similar share in their industry. Major airlines control over 80%. Millions of Americans have only one or two high-speed internet providers available to them. America has ten thousand fewer banks today than it did in the mid-1980s, and since the Great Recession, 25% of bank branch closures in rural communities occurred in communities of color. A few digital platforms exercise an incredible control over what we read, how we communicate and what happens to our personal information.

This kind of consolidation can be detrimental to our economy. And the harm is far from abstract or academic. It directly affects millions of families by growing the digital divide, creating banking deserts in too many communities of color and making it more difficult or expensive for Americans to eat, to travel or to go to the doctor.

The list of industries that are increasingly consolidated is long, but the trend is not inevitable. The fair enforcement of our country’s antitrust laws can help stop, and in some cases, reverse this trend. Antitrust enforcement can also deter conduct that forces consumers to pay higher prices and forces workers to accept lower wages.

The Justice Department will therefore vigorously enforce the antitrust laws to protect consumers, workers and less advantaged communities, and to promote a more free and fair economy for everyone. That starts with many of the initiatives already underway at the department.

Take digital markets. Many have raised concerns that “digital gatekeepers” maintain their position through a combination of anticompetitive mergers and outright anticompetitive conduct. We take these concerns seriously, and the department has made it a priority to understand and, where appropriate, address them.

Acquisitions involving potential or nascent competitors are one category of particularly concerning transactions because they undermine competition that can disrupt monopolies. As the D.C. Circuit recognized in Microsoft, acquiring firms before they can become a competitor — sometimes called a “killer acquisition” — is a classic tool for monopolists. The department’s case against Visa’s proposed acquisition of Plaid is a prime example. Our investigation revealed that Visa was trying to buy up a rival before it could disrupt the industry and so we sued to block the merger. In response, the parties abandoned their transaction. Plaid now remains an independent company.

The department will not shy away from similar challenges in the future. Killer acquisitions can sideline or silence ideas that might eliminate the barriers keeping too many Americans out of banking, housing and health care markets. We will therefore closely scrutinize acquisitions involving dominant firms and would-be rivals. In doing so, we should be careful not to discourage investment in new startups. But we should also remember that startups cannot thrive without a competitive economy.

The department’s lawsuit against Google for monopolizing search and search advertising markets remains a major priority as well. Our complaint focuses on how Google’s anticompetitive conduct has harmed competition, similar to how Microsoft did decades ago in favoring Internet Explorer and locking out Netscape. It also highlights how Google’s anticompetitive conduct has affected a huge range of consumer choices.

The bottom line is that we will not stand by and watch dominant digital platforms thwart competition. Digital markets may involve new technologies, but the tactics of these digital platforms are nothing new. Buying would-be rivals. Boxing out firms who won’t be bought. Leveraging a monopoly position in one market to grow a position in another. The Department of Justice has dealt with these tactics from the likes of Standard Oil and Microsoft. We will do so again whenever the facts and the law demand action to protect the economy, no matter how powerful the violator.   

Our merger enforcement must remain vigilant in the range of other industries undergoing consolidation as well. Most of us understand that when we have fewer choices for where to work or where to buy goods then prices go up and quality goes down. Corporate mergers work the same way. They can leave Americans with fewer choices, shifting power away from consumers and workers and concentrating it among fewer and fewer large companies. That is particularly true when mergers leave just a few competitors in the market. For example, in July 2021, the department successfully blocked a merger between Aon and Willis Towers Watson, two of the three largest insurance brokers in the world. The merger would have turned an industry dominated by a “Big Three” into an industry dominated by a “Big Two.” It would’ve left companies that rely on insurance brokers to lower the cost of health care and retirement plans with little to no alternatives. Ultimately, that means higher prices and lower quality for employees and retirees.

The department’s success in stopping the merger of Aon and Willis Towers Watson was an important victory. It is also an important warning sign to companies contemplating similar deals. I know Antitrust Division officials have said this before, but I hope companies are, in this moment, paying close attention: anticompetitive mergers should not make it out of the boardroom. If they do, we will not hesitate to challenge those mergers. And, if we litigate, the department – from leadership to our extremely talented career attorneys, economists and staff –  is committed to winning these cases.   

The department is also committed to criminally prosecuting executives and companies who violate the antitrust laws. When executives or companies make the decision to collude, rather than compete, they cheat consumers, workers and taxpayers out of the benefits of market competition.

The department has been particularly focused on executives and businesses who fix wages or allocate workers through so-called “no-poach” agreements. For example, the department recently indicted a medical care center “for agreeing with competitors not to solicit senior-level employees.” We took a similar approach with a healthcare staffing company and one of its executives who entered into agreements with competitors not to raise wages for nurses in a Las Vegas-area school district. These kinds of agreements deprive people of the chance to bargain for better work or better working conditions. They are also per se illegal. The department is therefore committed to investigating, prosecuting and ultimately ending these kinds of practices. American workers who are struggling to make ends meet may not always be able to stand up to their employer, but the department can and will.

Our criminal enforcement efforts also demonstrate that the department will stand up for American consumers. For example, we have prosecuted pharmaceutical companies and their executives for colluding to fix the price of generic drugs. We also successfully prosecuted several companies who fixed the price of canned tuna. And we have pursued companies and executives who fixed prices for broiler chicken products, including Pilgrim’s Pride, who pleaded guilty in February 2021 and was fined $107 million for its role in the conspiracy. At the end of the day, Americans should not have to pay more for food, medicine or anything else because executives decide to enrich themselves at the expense of American families.

Nor should American taxpayers have to pay more because executives distort the public procurement process. That is why the department has cracked down on bid rigging and other forms of collusion where federal, state and local governments — and ultimately taxpayers — are the victim.

This underscores another important priority for our criminal program. To deter criminal antitrust violations, the consequences cannot be felt by the companies alone. When wrongdoing comes from the C-Suite, we will hold executives responsible.

The department is also committed to working with our international partners on civil and criminal antitrust enforcement. We communicate with our international counterparts nearly every day to identify issues of common interest, strengthen our approach on those issues, and avoid inconsistent outcomes. That includes cooperating with 14 jurisdictions on 21 civil merger and non-merger matters just since January.

This work is particularly important when it comes to digital markets. International dialogue and discussion in these circumstances is not just a good idea — it is necessary to ensure that policies across different jurisdictions promote competition and aren’t incompatible with one another. While much of this work is done in bilateral discussion with our partners, we are also active in multilateral forums. For example, the division recently participated in an Organisation for Economic Co-operation and Development (OECD) hearing that focused on data portability and interoperability. The division has also been an active participant in the International Competition Network (ICN), including its ongoing project on the intersection of competition, consumer protection and privacy.

In addition to working with our international partners, we work with other federal agencies and state and local governments here at home. This kind of approach is essential for addressing many of the issues I’ve talked about today.

In many industries, executive agencies can use existing authority to constrain monopoly power and promote competition. That is the focus of the President’s Executive Order on Competition, which the department is working to implement alongside our executive agency partners.

The department has always worked with other federal agencies to advance sound competition policy, from filing public comments to providing technical assistance and coordinating on merger reviews. But the Executive Order has expanded those efforts. For example, the Antitrust Division has been providing technical assistance to the U.S. Department of Agriculture (USDA) as it strengthens rules implementing the Packers & Stockyards Act, the 100-year-old law that was originally designed to protect poultry and hog farmers and cattle ranchers from unfair, deceptive and anticompetitive practices in the meat markets. We are also strengthening partnerships with agencies who have the ability to review and approve transactions that can affect competition. Taking a consistent approach in enforcing the antitrust laws and other agencies’ public interest mandates is critical for addressing market concentration, removing barriers to entry and promoting competition.

All of these efforts — the department’s commitment to vigorously enforcing the antitrust laws, our partnerships with international competition authorities and our cross-department collaborations to advance competition — underscore three key points.

First, the Antitrust Division’s career staff has done an extraordinary job, particularly during the challenges of the pandemic, to serve American consumers, workers and taxpayers, and to help build a more free, fair and competitive economy. Their commitment to the Antitrust Division’s mission is inspiring and getting to work with these dedicated public servants is one of the best parts of my job.

Second, the benefits of competition are an essential part of securing a free and fair economy. As John Sherman said long ago, “[i]f we will not endure a king as political power, we should not endure a king over the production, transportation and sale of any of the necessities of life.” When a company undermines competition, they make it more difficult for Americans to afford their necessities. Raising prices on chicken means more families struggle to put food on the table. Lowering wages could be the difference between someone working one job or two.

At the same time, markets that lack competition shift power from consumers and workers to powerful corporations. Promoting competition through antitrust enforcement levels that playing field and plays a critical part in promoting economic opportunity and equity.

Finally, the department takes antitrust enforcement seriously. That means if conduct threatens to harm competition, we will dedicate the time and energy necessary to challenge it. Companies, executives, boardrooms and shareholders should take note: if your company approves a merger that may lessen competition, we will block it. If you fix prices, rig bids or divide markets, we will prosecute you whether your scheme cheats consumers or harms workers. And if you monopolize markets to maintain a dominant position, even in a high-tech industry, we will intervene to put a stop to it. The department’s responsibility to pursue justice in the American economy demands no less.  

Thank you.