Newspaper article Charleston Gazette Mail

America Facing a Competition Deficit? ; Administration Says It Wants More Free Market Competition

Newspaper article Charleston Gazette Mail

America Facing a Competition Deficit? ; Administration Says It Wants More Free Market Competition

Article excerpt

WASHINGTON The Obama administration has a new economic worry: competition or, allegedly, the lack of it. Americas businesses, the indictment goes, merge too often, innovate too little and bilk consumers too much. The open question is whether this argument is shrewd politics, shrewd economics or both.

No doubt, the politics are enticing. In this election season, criticizing big, impersonal firms has a strong populist appeal. And Americans venerate competition, at least in the abstract, as a check on companies market power. So the White Houses pitch is familiar.

The president is launching a new initiative to stoke competition, the White House announced. No corporation [will] unfairly squeeze their [sic] competitors, their workers, or their customers. Strong stuff.

Backing the words with deeds, the president supported a proposal from the Federal Communications Commission to open up set-top cable boxes to competition. Renting the set-top boxes (at a reported average annual cost of $231) is a rip-off, the White House suggested. If cable companies faced competition, consumers could buy boxes with more digital features at less cost.

The president also asked departments and agencies to report back in two months on pro-competitive executive actions they could take to empower consumers, workers and entrepreneurs.

As the administration sees it, many U.S. firms are engaging in an orgy of anti-competitive behavior. Testifying recently before a congressional committee, Bill Baer, the assistant attorney general of the Antitrust Division, reported that in fiscal 2015, there were 67 proposed mergers valued at more than $10 billion more than twice the number in fiscal 2014.

To the administration, many mega-mergers are motivated by the quest for greater market power: the ability to raise prices. Not surprisingly, the administration has rejected many of these deals: the merger between cellphone firms AT&T and T-Mobile; Comcasts proposed merger with Time Warner Cable; appliance-maker Electroluxs acquisition of General Electrics appliance division; the proposed merger of two large makers of semiconductor manufacturing equipment, Applied Materials and Tokyo Electron. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.