(Bloomberg) — Elizabeth Warren slammed Washington for failing to challenge giant corporations. Bernie Sanders assailed the power of Wall Street and the pharmaceutical industry. Cory Booker vowed to appoint more judges and antitrust enforcers and even Joe Biden is preparing a trust-busting plan.Democratic presidential hopefuls are coming out in force against the rapid pace of corporate consolidation, a message to 2020 voters that gained volume during their first debates in Miami last week. They’re expanding their pledges to take on big tech, including Facebook Inc. and Alphabet Inc., to other industries.Attacking big corporations is both a political message and a policy prescription. It’s one way Democrats think they can address the concerns of voters who have fallen behind, even as the U.S. economy continues to expand. As Democrats gear up to try to take back the White House in 2020, they hope the anti-corporate tone taps into the populist passion that propelled Donald Trump in 2016.“Whoever is elected on the Democratic side would be more aggressive on antitrust than we have seen in decades,” said Jason Furman, a former chairman of President Barack Obama’s Council of Economic Advisers who chairs a U.K. initiative on digital competition.So far, voters views are mixed, but it’s a message that could take hold as frustration grows with large companies and concerns, including how personal data are being used.With that in mind, some of the party’s top candidates are warning of a new robber-baron era, recalling the powerful oil and steel behemoths of the late 19th and early 20th centuries that the first American antitrust laws were designed to tame. Their campaigns often cite studies showing that consolidation may be responsible for higher wealth inequality, slower productivity growth, fewer startups and stagnant wages.The candidates are putting together plans to target a wide range of industries including agribusiness, telecom and health care. Booker, for example, has offered legislation that places an indefinite moratorium on acquisitions in the food and agriculture sector and Amy Klobuchar sponsored an antitrust overhaul that would require merging companies to prove their consolidation wouldn’t harm competition.The proposals mark a shift from previous administrations that had a lighter regulatory touch, allowing consolidation in almost every sector of the U.S. economy.Superstar CompaniesMore than three-quarters of U.S. industries over the last two decades have seen an increase in concentration, studies show. Markups — how much a company charges for a product above its own costs — have soared, another sign of rising market power. These findings are consistent with research showing a smaller number of firms across the U.S. economy capturing a greater share of sales, giving rise to so-called superstar companies.Democrats already started questioning this trend after winning the House majority last year. Representative David Cicilline of Rhode Island, the antitrust subcommittee chairman, is investigating concentration in the tech industry. The U.S., he has said, is in the midst of a “monopoly moment” that stifles competition. One of Cicilline’s questions is why there hasn’t been a “serious antitrust investigation” in 20 years.For more: House Panel Kicks Off Antitrust Probe With Focus on News MediaAt the same time, the Justice Department and Federal Trade Commission have carved up oversight of four tech giants, with the Justice Department taking responsibility for Alphabet’s Google and Apple Inc., while the FTC is investigating Facebook and Amazon.com Inc.These inquiries could gather steam under a Democratic president, who sets the tone for antitrust enforcement through appointees to the Justice Department and the FTC.A Democratic White House would also likely deploy broader agency regulatory authority to check the power of dominant companies in many industries. That includes the Transportation Department on airlines, the Department of Health and Human Services on insurance and pharmaceutical companies, the Federal Communications Commission on telecom providers, and the Agriculture Department on agribusiness giants, according to Gene Kimmelman, chief counsel for competition policy in the Obama Justice Department, now chairman of Public Knowledge, an advocacy group.For example, the Agriculture Department’s Grain Inspection, Packers and Stockyards Administration could restore a regulation the Reagan administration removed barring meat packers from having an interest in feed lots, reducing the packers’ leverage in purchasing livestock, said J. Dudley Butler, an Obama-era administrator of the agency. More aggressive investigation and prosecution of unfair practices and preferential treatment also would have an impact, he said.When it comes to deals still seeking approval, Furman said, T-Mobile US Inc. and Sprint Corp. “probably wouldn’t be able to” merge without a legal challenge from the federal government under a new Democratic administration, though the deal will likely be decided before the election.For More: U.S. Wants T-Mobile to Create New Rival Before Clearing MegadealEven so, a Democrat in the White House would face legal constraints delivering on the wholesale breakup of industries that Warren and Sanders seek. It would be difficult to pass new antitrust laws while Republicans can filibuster legislation in the Senate, and the swelling ranks of conservative judges Trump has been appointing mostly aren’t supportive of more aggressive interpretation of antitrust law, said Diana Moss, president of the American Antitrust Institute.“The probability is low under the current system that you would get the breakups envisioned by some of the candidates,” Moss said. AT&T was the last major U.S. company broken up on antitrust grounds more than three decades ago.Democratic ‘Convergence’Even Biden, who established a business-friendly reputation in the Senate, has opened the door to tougher antitrust enforcement. Biden praised the “very strong case” made by more progressive 2020 candidates to crack down on tech companies, while saying it’s ”premature” to make a final judgment on breaking them up.“I don’t think we spend nearly enough time focusing on antitrust measures,” he told the Associated Press in May. “And the truth of the matter is I think it’s something we should take a really hard look at.”The former vice president believes the American economy suffers from declining competition and supports more aggressive federal antitrust enforcement, according to a Biden campaign official, who declined to provide further details. Biden plans to give a fuller explanation of his antitrust plan later in the campaign, the official said.Pete Buttigieg, whose presidential campaign has attracted fundraising support from Wall Street and other industries, also has sounded the theme. “The FTC needs to be empowered to prevent, and in come cases reverse, the mergers of some of these companies, not just in tech, but across the American economy,” he told the New York Times.Klobuchar promised she would use her first 100 days as president to create stricter standards for reviewing mergers and begin an “aggressive retrospective review” of previous mergers. She also pledged to instruct HHS to issue regulations to stop anti-competitive practices in the pharmaceutical industry, including collusion to delay lower-priced generic drugs.“This is an area where there is for the most part convergence among the Democrats,” Furman said. “I don’t think there’s anyone on the stage, or at least the big stage, defending a lax attitude on antitrust.”More ConcernWhile Warren and Sanders are the most vocal presidential candidates on combating corporate power, antitrust enforcement has been a rising Democratic priority for several years.The Obama administration began by promising to bring monopolization cases against corporate giants but only brought one: a case against a hospital in Wichita Falls, Texas.Still, it blocked some major mergers. In 2011 the Justice Department sued to stop AT&T Inc.’s proposed takeover of T-Mobile, causing the companies to abandon the deal. But critics argue the administration was too passive in the face of the growing power of tech giants.By Obama’s final year, the administration was showing more concern. The Council of Economic Advisers warned in a 2016 report that competition was declining across the economy, and the president issued an executive order instructing agencies throughout the government to use their regulatory powers to combat anti-competitive conduct.That would just be the beginning if Democrats retake the White House.–With assistance from David McLaughlin.To contact the reporter on this story: Mike Dorning in Washington at [email protected] contact the editors responsible for this story: Joe Sobczyk at [email protected], Sara Forden, John HarneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
