The new approach takes a much broader view of the ills of business concentration.
Good morning.
With two sweeping executive orders—the first on “America’s Supply Chains” issued February 24 and the second on “Promoting Competition in the American Economy” issued Friday—the Biden administration has dramatically redefined the U.S. government’s relationship with the economy.
The February order was the first serious attempt at industrial policy in this country in half a century. The Friday order does lots of small things—allows hearing aids to be sold over the counter, ensures easier refunds from airlines, attacks noncompete clauses in labor contracts, permits drug imports from Canada—and also one very big thing: it redefines the role of antitrust enforcement.
For decades, the reigning rule of antitrust has been that of consumer benefit. Amazon may be big and powerful, but if the consumer gets more choices and lower prices, who cares? The new approach takes a much broader view of the ills of business concentration, including its effects on small business, labor markets, agricultural markets and more. The goal of the order is explicit: reduce the concentration of power in large companies.
Is that a worthy goal? There’s plenty of evidence that businesses scale faster these days than they used to, and concentration of business power has increased. But is that necessarily a bad thing? The Economist recently noted that there have been 19 firms created in the past 25 years that are now worth over $100 billion. Of those, nine are based in the U.S., eight are based in China, and none are in Europe. Does that mean Europe has done a better job curbing business concentration? Perhaps. But clearly at the expense of business dynamism.
Both executive orders are worth reading, here and here. After you’ve read them, it’s also worth remembering two things:
1) There’s a limit to what the executive branch can do without clear authorization from Congress. And there is a conservative-leaning court system standing by to enforce that limit.
2) Anything done by executive order also can be undone by executive order—a disturbing prospect for a business community hankering for more certainty in public policy.
Also of note this weekend, Novak Djokovic won the Wimbledon title and Richard Branson shot into space. The Wimbledon final lasted three times as long as the Branson trip.
Finally, be sure to read the Fortune Hong Kong team’s take on the Didi debacle, here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Right to repair
As part of President Biden's competition push, he's asked the FTC to make tech firms let consumers repair their own devices—be it phones or tractors—or to use a technician of their choice, rather than being forced to use authorized repair technicians. Big Tech says this could pose a security risk. Fortune
Digital tax
The EU is delaying the unveiling of its upcoming "digital tax" proposals until later this month, and may push it out as far as the fall. In the context of the G20 having endorsed the G7 global minimum-tax deal, the U.S. has been pressuring the EU to drop the idea of hitting Big Tech with a targeted tax. Financial Times
ByteDance IPO
ByteDance indefinitely suspended its IPO plans while under pressure from Beijing. According to the Wall Street Journal, Chinese authorities warned the TikTok firm to focus on addressing data-security risks. Didi Global, by contrast, pressed ahead with its U.S. listing and is now experiencing a cybersecurity-related crackdown in China. Wall Street Journal
Vaccinated visitors
The island of Malta has become the first EU country to ban all unvaccinated visitors. From Wednesday, it will no longer also be possible to enter the country with a negative PCR test. Health Minister Chris Fearne: "We need to protect our society." Reuters
Board diversity: A lasting impact The impact of placing women and minorities into board chair and nom/gov chair positions can pay immediate and future dividends for the promotion of board diversity. Explore findings from the Alliance for Board Diversity and Deloitte Missing Pieces Report, 6th edition. Read more
Branson and Musk
"It was so great to find Elon in my kitchen at 3 o’clock." That's Richard Branson, talking after his historic Virgin Galactic grazing of space. Musk came to hang before the Bezos-beating flight. Bonus read: Musk tweeted about and thus boosted Dogecoin, though the tweet was pretty geeky, being about the technicalities of Dogecoin blockchain updates. Fortune
Blockchain stress
Speaking of crypto, JPMorgan experts fear El Salvador's acceptance of Bitcoin as legal tender might not work out so well. Over 90% of the cryptocurrency hasn't changed hands in over a year, so daily payment activity in the country would represent a significant chunk of the total. JPMorgan's report says the illiquidity and nature of the volume could create "a significant limitation on its potential as a medium of exchange.” Fortune
Cleaning air 1
The U.S. has an insufficiently-regulated air-purifier sector, with some air cleaners—marketed to gyms, schools and so on—being falsely marketed as devices that can kill the coronavirus. University of Toronto professor Jeffrey Siegel: "If you get any serious government oversight, a big chunk of this industry will go away." Fortune
Cleaning air 2
Carbon credits are becoming ever more important, so here's a timely explainer by Fortune's Geoff Colvin, covering the different kinds, how they might help the environment, who certifies them, and where the pitfalls may lie. Fortune
This edition of CEO Daily was edited by David Meyer.
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