The Corner Newsletter, October 18, 2018: Entrepreneurs and Investors Take Stand Against Monopoly at “Right to Compete” Event — Remembering Robert Pitofsky

In this issue, we highlight the powerful speeches of Sens. Booker, Capito, Warner, and SEC Commissioner Jackson at Open Markets’ “Right to Compete” conference. And we remember the life and legacy of former FTC Chairman Robert Pitofsky.

October 19, 2018  |  by Open Markets

America’s Entrepreneurs, Investors, and Leaders Take a Stand Against Monopoly

Last Thursday, the Open Markets Institute and Village Capital hosted a conference titled “Right to Compete” on monopoly and entrepreneurship. The conference brought together Sens. Shelley Moore Capito, R-W.Va., Mark Warner, D-Va., and Cory Booker, D-N.J., SEC Commissioner Robert Jackson, as well as entrepreneurs, investors, scholars, and advocates to discuss how corporate concentration hurts independent businesses, investors, innovation, communities, and individuals.

The conference demonstrated the growing consensus across the political spectrum – and increasingly throughout the business community – of the need to address the political and economic threats posed by today’s monopolists. In doing so, the conference built on the work of a growing number of policymakers who are debating the pressing problem of concentration, including Sens. Elizabeth Warren, D-Mass., Amy Klobuchar, D-Minn., Orrin Hatch, R-Utah, and Bernie Sanders, I-Vt., as well as Congressman David Cicilline, D-R.I.

You can watch footage of our event, including all of the keynote addresses, here.

A few of the highlights:

  • Sen. Booker delivered the strongest and most wide-ranging condemnation of monopolization in a speech that focused closely on the struggles of independent businesses, farmers, and workers. “The root of so many of the challenges we’re facing in America right now – from the stifling of innovation, the stifling of entrepreneurship, wage stagnation, income inequality,” Booker said, is “the incredible concentration of economic and political power in this country. Our very ideals are at stake.” (see additional quotes from Senator Booker’s speech, below, and ThinkProgress’ coverage of the speech here).
  • Sen. Warner warned that the challenges posed by big technology companies won’t simply go away; “This question both about size and power of these enterprises is only going to grow larger.” Future misinformation campaigns, he said, could use deep fake videos to disrupt American society in fundamental ways: “The ramifications of that kind of misuse and that kind of misinformation will rock our markets or rock our personal lives or rock our political system in a way that we can’t retreat back from.” The senator also said there is a range of potential solutions to the power of the platform monopolies, including data and price transparency, portability and interoperability standards, and maybe even a new “competition model.” Senator Warner lamented America’s ongoing “failure to provide leadership” to other nations on privacy and the Internet of Things.
    Watch Warner’s interview with Bloomberg after his speech here.
  • Sen. Capito spoke of the challenges that small businesses in West Virginia face, including broadband access. Capito pointed out that the way government maps broadband availability favors larger providers. “If you have a census tract that shows that one person in that census tract is served, then that entire census tract is considered served,” she said. The result is that mapping favors larger providers over local cooperative broadband providers and “prevent[s] that co-op from being able to come into that area under some Connect America Funds.”
  • Commissioner Jackson called on the SEC to do more to foster competition. Shaping a competitive marketplace is not simply the responsibility of the Federal Trade Commission and the Department of Justice, he said. That view “is wrong as a matter of law, economics, and history – and bad for investors as a matter of policy.” The SEC, he said, could do more to stop industries like stock exchanges, investment banks, and credit rating agencies, from abusing their gatekeeper power over financial markets.
    Watch Jackson’s interview with Bloomberg after his speech here.

Sen. Booker’s speech on America’s monopoly crisis, at the Right to Compete conference last Thursday, was especially powerful and detailed. A few additional quotes:

  • On how concentration in food systems is harming rural America:
    “Today just a small number of giant companies control every single link of the American food chain. After decades of consolidation, four firms, just four firms, in almost every sector in the food and ag economy have acquired abusive levels of market power, and U.S. farmers and ranchers no longer compete in open and fair markets.”
  • On some of the ways monopolies hurt workers:
    “We’re seeing massive companies like IHOP limit the mobility of folks like Natasha through the overuse of non-competes and so-called no-poaching clauses. Clauses that are designed to protect high-level trade secrets are now being used by massive corporations to keep wages down and keep labor from competing. Folks working as waitresses and home health aides and janitors and mechanics are being limited in their freedom to compete.”
  • On how monopolization harms independent, black-owned, businesses:
    “Now, today, generations later, Black-owned businesses, unfortunately – like entrepreneurs of all types and small businesses nationally – they are being pushed out or swallowed up by corporate consolidation on an incredible scale, a stunning scale.”
  • On how antitrust enforcers have failed:
    “For too long, our antitrust agencies have focused solely on whether a merger or acquisition will be good for only one thing—low consumer prices. That narrow approach is not only misguided, but also a blatant departure from past legislative intent. In 1890, the year of passage of the Sherman Antitrust Act, one senator ‘lamented that if large-scale industry were allowed to grow unchecked, it would “crush out all small men, all small capitalists, all small enterprises.”’ Senator John Sherman described his bill as, I quote, ‘a bill of rights, a charter of liberty.'”


  • In a unanimous 6-0 decision, the Supreme Court of Kentucky ruled that state law prohibits employers from conditioning employment on employees agreeing to mandatory arbitration to resolve disputes. Though federal law requires people and courts to honor arbitration agreements, the state supreme court held that Kentucky employment law prohibits “conditioning employment on agreement to arbitration, not the act of agreeing to arbitration.”
  • Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-V.T., sent a letter Tuesday to Amazon saying that they were “alarmed at recent reports that your company is distributing anti-union materials to Whole Foods managers that directs and encourages potentially illegal interference with the rights of thousands of workers.” The two asked for information about the video the e-commerce giant sent to its Whole Foods managers, and how the corporation makes sure that it does not violate federal labor law.
  • Two weeks ago, the Food and Drug Administration approved Bose’s request to market its hearing aid for people with mild to moderate hearing loss. This introduces competition into the hearing aid market by allowing people to buy hearing aids without having to go to a specialist, and is a result of the Over-the-Counter Hearing Aid Act of 2016, introduced by Sens. Elizabeth WarrenD-Mass., and Chuck Grassley, R-Iowa. 
  • On Tuesday, the Securities and Exchange Commission unanimously rejected the New York Stock Exchange’s and Nasdaq’s request to raise fees they could charge for certain proprietary data, and deferred consideration of 400 other proposed fee increases. This comes after SEC Commissioner Robert Jackson delivered a speech at the end of September calling out exchanges last month for abusing their gatekeeper power over the country’s stock markets.


  • Sandeep Vaheesan and Frank Pasquale published “The Politics of Professionalism: Reappraising Occupational Licensing and Competition Policy” in the Annual Review of Law and Social Science. In it, the two argue that much opposition to occupational licensing “rests on thin empirical foundations” and overlooks the ways that licensing rules “help stabilize working- and middle-class wages.”
  • Matt Stoller’s article in Foreign Affairs argues that the offshoring of production capacity for vital industrial components, and the concentration of much of that capacity in single locations, poses a huge national security threat to the United States. “Restructuring the Western corporate commons so it cannot be exploited by bad actors is one of the key national security challenges of our era,” he wrote.
  • Sarah Miller and David Segal, responding to the latest Facebook scandal where a data breach reportedly compromised the data of 50 million users, called on the FTC to break up Facebook in USA Today.
  • Slate‘s article on Facebook’s new Portal tablet quoted Matt Stoller explaining that the new device is part of Facebook’s larger strategy of capturing as many users as it can: “They understand that it’s important to be the monopoly player where there’s any platform.”
  • Yesterday, Lina Khan spoke at the FTC’s Competition and Consumer Protection in the 21st Century hearings on the panel, “Nascent Competition: Is the Current Analytical Framework Sufficient?” She argued for the importance of protecting competition in digital markets: “Even if you believe that the current dominance of these firms is nothing to worry about, because ‘We’re going to see the inexorable forces of creative destruction swoop in and dislodge their dominance,’ that can only be true if tomorrow’s innovators are not blocked by today’s incumbents.”
  • Commenting on the news that Google had covered up the exposure of the personal data of millions of Google+’s users for three years, Matt Stoller told Politico‘s Morning Tech that Google may have broken the terms of its 2011 consent decree with the FTC.
  • In announcing its new series on Amazon’s power in the economy, CNN pointed to the Open Markets Institute as helping to raise concern over Amazon’s market power. Foreign Policy, warning that “Net Neutrality’s End Will Let Power Eat the Internet,” pointed to “tech-savvy policymakers such as Tim Wu and Lina Khan” as examples of the broad coalition in favor of regulating Internet platforms.

Remembering Bob Pitofsky, Defender of Democracy and American Liberty

When Robert Pitofsky died at his home on October 6, at age 88, the antitrust community lost not only a courageous enforcer of the law but a serious scholar of history who understood that private monopoly is one of the greatest threats to American liberty and democracy.

Pitofsky’s landmark 1979 article in the University of Pennsylvania Law Review, “The Political Content of Antitrust,” has, for a full generation of enforcers, served as the most important description of the role that antitrust must play in dispersing economic and political power. Later, as chairman of the Federal Trade Commission in the 1990s, Pitofsky led fights to prevent concentration of power over the news media and book publishers.

In 1987, Pitofsky’s testimony to the Senate Judiciary Committee played a key role in the Senate’s rejection of Robert Bork’s nomination to the Supreme Court. Pitofsky focused on the anti-democratic nature of Bork’s philosophy. “He has expressed a fundamental disdain for the ability of Congress to legislate in the economic field or to understand economics, and a view that the courts have been weak and spineless in going along with Congress’ silly laws in this area.”

Albert Foer, founder and former president of the American Antitrust Institute, said Pitofsky believed “antitrust has to pay attention to its historical, legislative background, which includes a lot of constitutional-type values: decentralization, and checks and balances that would apply to the economy as well as to the polity.”

Eleanor Fox, the Walter J. Derenberg Professor of Trade Regulation at New York University School of Law, said Pitofsky believed “that the antitrust laws were to protect those who were not in power, not to protect those who were.”

Pitofsky, Fox added, “was concerned that the Bork view was going to devastate the antitrust laws and make them very sympathetic to incumbents. Which, of course, is what happened.”

Eleanor Fox on Robert Pitofsky

Earlier this week, Open Markets spoke with Eleanor Fox about her work – and friendship – with Robert Pitofsky. In one of her stories, Fox recounted meeting with EU Competition Commissioner Karel van Miert, along with Pitofsky, in the 1990s.

“Van Miert was very interested in what was happening in the United States, and the theories of competition and the protection of competition here. He had a lot of questions that he wanted to ask us.

But as it turned out, which was extremely usual at the time, he really wanted to ask a man. We were, the three of us, sitting on the couch and two chairs. We were just sitting and chatting. And every time he asked a question, he would ask Bob. 

And then Bob started to say, ‘Oh, I think Eleanor has a really good answer to that question.’ He said it several times, because van Miert persisted.

I remember that. That’s happened to me lots of times, but I can’t remember another time when somebody like Bob turned to me and brought me in very centrally. I would’ve otherwise been marginalized from the conversation.”



Number of years that pharmaceutical corporation AbbVie is trying to extend its monopoly over the drug Humira to, according to a report by i-Mak. The drugmaker hopes to do this thanks to the 247 patent applications it has filed in the Patent and Trademark Office. Humira treats many diseases including include arthritis, Crohn’s disease, and colitis.


  • “The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies” (Bloomberg Businessweek, Jordan Robertson and Michael Riley): How China uses bottlenecks in the production of American technology to ensure “long-term access to high-value corporate secrets and sensitive government networks.”
  • “In Montana, a Tough Negotiator Proved Employers Don’t Have to Pay So Much for Health Care” (ProPublica, Marshall Allen): A gripping account of how one Montana official successfully negotiated with health insurers and providers for lower prices.
  • “Accounting for Incorporation: Part 1” and “Accounting for Incorporation: Part 2” (Law and Political Economy, Robert Hockett): An accessible series on the history of incorporation law and how to make corporations work for the public: “If we wish to preserve capitalism, then, we must make our capitalism accountable capitalism again. And that means accountable incorporation.”

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In America today, wealth and political power are more concentrated than at any point in our country’s history.

The Open Markets Institute, formerly the Open Markets program at New America, was founded to protect liberty and democracy from these extreme -- and growing -- concentrations of private power.

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