The Future of Antitrust

In his 1979 State of the Union address, President Jimmy Carter proposed to fight crippling inflation through, in part, “better enforcement of our antitrust laws.” A month later, Carter withheld support from new antitrust legislation championed by Sen. Ted Kennedy, and Kennedy’s efforts fizzled. The next year Carter lost the presidency to Ronald Reagan, who ushered in an era of widespread, little-challenged corporate concentration that continued largely unabated through the Obama administration.

When, in February, President Biden asked Congress to “pass bipartisan legislation to strengthen antitrust enforcement,” it marked the first time since Carter’s address that a president’s State of the Union had included the word “antitrust.” Since taking office, Biden has placed aggressive antitrust advocates in prominent positions, including Lina Khan at the Federal Trade Commission and Jonathan Kanter at the Department of Justice. They have joined a group of concerned senators, including Democrats Amy Klobuchar and Elizabeth Warren and even some Republicans like Mike Lee, to create new momentum around antitrust.

Klobuchar and Lee led a recent hearing of the Senate Judiciary Committee’s antitrust subcommittee into the monopolistic practices of concert promoter Live Nation and Ticketmaster, which merged in 2010. Ticketmaster built its monopoly through a run of acquisitions—it bought seven competitors between 1985 and 1991—and a mix of aggressive and illegal tactics like predatory pricing, kickbacks, exclusivity agreements with artists and venues, and retaliation against those challenging its position. When Pearl Jam circumvented Ticketmaster by scheduling a 1994 tour in far-flung outdoor venues, the company was accused of organizing promoters to boycott the tour. A subsequent antitrust investigation by the Justice Department ended without action against Ticketmaster.

Since then, Ticketmaster’s fees have grown, sometimes reaching up to 75 percent of ticket face value. Now, “Live Nation is so powerful,” Klobuchar said in her opening statement, “that it doesn’t even need to exert pressure, it doesn’t need to threaten, because people just fall in line.” The hearing followed a botched presale of tickets for a Taylor Swift tour, which left many fans stranded after hours of trying to navigate a faulty system. An ongoing investigation into the company could result in an anti-monopoly suit. Live Nation has responded by ramping up its lobbying operation and retaining the antitrust subcommittee’s former general counsel.

On the same day as the hearing, Kanter announced a suit against Google’s ad business. Where Ticketmaster has inserted itself between artists and fans, Google occupies a chokepoint between advertisers and publishers. A series of acquisitions, forced adoption of Google tools, and anticompetitive ad auctions have left publishers with few alternatives to Google’s service, which extracts an average of 30 percent of ad revenue. Lost advertising revenue has contributed heavily to the recent decimation of local journalism.

Antitrust advocates are also proposing new legislation to rein in anticompetitive practices, especially in big tech. In a recent speech of her own, Sen. Warren listed bills that would prohibit tech platforms from “unfairly preferencing their own products” and “abusing their control over their app stores.” Despite broad bipartisan support, Senate Majority Leader Chuck Schumer has never brought these bills to the floor for a vote. Critics have pointed to Schumer’s substantial ties to big tech, including numerous former staffers and a daughter now lobbying for the industry. In a divided government, antitrust legislation is one of the few items on Biden’s agenda that might have enough votes to pass, but the new Speaker of the House, Kevin McCarthy, also has a reputation for friendliness to big tech. Antitrust advocates will have to contend not just with corporate concentration, but also with the concentration of power in Congress.