Competition and the Importance of Anti-Trust Laws for Americans- Part 2

competition antitrust small business and consumers

The impact of anti-trust issues on consumers and small business owners.

 

Editors note: This is part two of a two part series that examines the renewed academic interest in anti-trust. The first article Competition and the Importance of Anti-Trust Laws for Americans- Part 1 focuses on the traditional anti-trust issue of price increases by large companies that control competition at the expense of consumers. Periodically Latin Business Today shares topical views by its contributors, this piece soley represents the view of the author.

The Amazon And Koch Brothers Anti-Trust Questions

Could Amazon and the Koch Brothers be examples of today’s new form of monopoly or oligopoly abuse of market powers?

  • The first of this two part article series explored traditional anti-trust questions around large corporations using their market powers to unfairly raise consumer prices. 
  • This second issue explores the new focus of legal and economic anti-trust academia.

This new anti-trust focus asks these two questions:

  • Does the disproportionally large lobbying and campaign financing expenditures by large corporations represent a new form of anti-trust activity that is unfairly hurting competition, consumers and the environment?
  • Are companies like Amazon, Apple and Google using their mega-sized digital platforms to unfairly manipulate consumer decision making on what to buy and who to buy from?

Think Great Recession And Lobbying

Polls still find that voters think the cause of the Great Recession was due to bank lobbying that won relaxed regulations which enabled their profits at the expense of a financial collapse. 

Polls still find that voters view the handling of the Great Recession as a bank bailout paid for by evicted homeowners and taxpayers. 

These legacy Great Recession consumer/voter opinions cut to the core of how to define business rights regarding lobbying and campaign contributions.

Specifically, is business lobbying an act of free speech guaranteed under the constitution or is it a manipulation of government by a special interest?

The 2010 Supreme Court decision labeled “Citizens United” was a huge shift toward making unfettered lobbying and election campaign financing an act of free speech protected by our constitution. By a 5-4 vote, the Court conveyed onto corporations the same freedom of speech rights as those held by U.S. citizens.

The objections to this decision, strongly expressed by the late Senator John McCain, was that this decision opened wide the barn door to political manipulation of government on behalf of those who could spend the most on lobbying and campaign finance. 

Koch Brothers Campaign Financing Compared To U.S. Citizens

The Koch Brothers provide a case study example on how the Supreme Court’s Citizens United decision now raises the anti-trust question of whether large businesses are gaining unfair advantage through campaign contributions and lobbying.

The Koch Brothers are global sellers of coal. The Benton Foundation reported that the Koch Brothers worked to contribute $900 million in the 2016 general election. That amount is approximately on par with what the Democratic and Republican Parties each spent during the 2016 campaign

The Koch Brothers’ campaign finance influence compares to only .32% of all U.S. adults making a campaign contribution of over $200. 

This compares to the average individual contribution being $600-800.

Anti-trust issues are raised if there is a link between the Koch Brothers’ disproportionally large campaign contributions and government decisions such as the denuding of environmental regulations that were limiting coal sales and advantaging the sale of cleaner fuels.

If there is such a link then consumer health is being harmed by increased air pollution because more coal is being burnt than would have been burnt without successful lobbying and the influence gained from large campaign contributions. 

Consumers also could be harmed if Koch Brothers’ lobbying and campaign contributions so influenced public policy that it increased the competitiveness of coal at the expense of potentially lower priced natural gas and renewable energy. 

This anti-trust question is not just about the Koch Brothers.

Is there a link between America paying the world’s highest drug prices and the drug industry spending $3.5 billion during the last 20 years on lobbying? 

These are just two examples of the growing evidence that large companies, or collusion among companies, are using disproportionally large lobbying activities and campaign donations to win commercial advantages that they could not earn through competition for consumer sales.

Next page: Our Favorite Digital Platforms and What This Means To You and Our Economy

 

Pages

About the author

Bill Roth

Bill Roth is a disruptive tech business pioneer that led teams in launching the first hydrogen fueled Prius and in developing one of the first non-thermal utility scale solar power plants. He has applied his behavioral economics expertise to develop disruptive pricing and consumer engagement digital platforms. Visit his LinkedIn profile to learn more on how Bill is coaching clients on disruptive technology strategies that win customers and competitive advantage. 
 

 

Website