Congressional Republicans have made headlines recently calling for the revocation of Major League Baseball’s antitrust exemption in retaliation to the league’s political activism. Following the passage of a controversial restrictive voting law in Georgia on April 2nd, MLB decided to take a stand by moving the 2021 All-Star Game, a major revenue-generator for the state, out of Atlanta. In response Senator Mike Lee of Utah, among others, argued it was time to “stop granting special privileges to specific, favored corporations” and revoke the antitrust exemption. In place since 1922, it grants MLB freedom from antitrust laws governing player and media contracts and franchise movement.
Senate Minority Leader Mitch McConnell threatened that MLB as well as Coca-Cola and Delta Airlines — two Georgia-based companies which have also been outspoken against the law — “will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.” Indeed, this issue is part of a growing trend in Republican politics, in which the party of big business has had to contend with business activism often opposed to the policies and ideas they promote. Notably, the decision of popular social media sites to deplatform former President Donald Trump in January also prompted many Republicans to decry the actions of big business. What does this mean for the future of the Republican party and for the antitrust movement in the United States?
The Republican party has long built a platform around the so-called unfettered free market, compared to the Democrats, tending to promote smaller government and a less regulated economy. This is not to say Republicans have historically been supportive of monopolistic activity. Indeed, antitrust legislation, preventing over-concentration of market power through targeted firm breakups and regulation of mergers and acquisitions, has been in line with party policy in the past. Over the last century of presidential elections, Republican and Democratic candidates have mentioned supporting antitrust policies a roughly equal amount in their campaigns. But the implementation of such policy, particularly by Republican administrations, has been sorely lacking over the past few decades.
The golden era of antitrust relied upon a general optimism about the effectiveness of government intervention, a holdover from the New Deal and World War II, as well an idealized view of market competition. Since the 1970s however, the once-thriving political tradition of antitrust has fallen to the wayside due to a growing skepticism of government regulation and a belief in the ability of markets to self-correct in the face of over-centralized market power. Republican pro-business policies, which have resulted in increasingly monopolistic trends, have become the norm especially since the Reagan administration, which saw massive corporate tax cuts and market deregulation. Republican politics have been defined by a shift from the recognition that some amount of antitrust regulation is necessary to deter anti-competitive activity and improve market health to a view of regulation as antithetical to free market policies.
However, in recent months, Republican support for cracking down on monopolies, especially big tech companies, has skyrocketed. This has been largely motivated by a perception that such companies censor conservative ideas: a viewpoint exacerbated when major social media sites Facebook and Twitter took steps to regulate extremist content after the January 6th Capitol riot.
Calls for increased regulation are certainly a departure from recent Republican trends. As evidenced in the recent case involving the MLB, such calls are also evidently motivated more so by a desire to retaliate against businesses that have opposed Republican policies than by a shift in economic principles. Nonetheless, the reshaping of Republican party identity, marked by a growing hostility to big business, may contribute to a revival of American antitrust that would be broadly speaking beneficial.
Though there is some debate among economists about the extent to which monopoly can be harmful, the general consensus is that competition — not concentrated market power — drives innovation. The lack of antitrust intervention in recent decades has been correlated with a decrease in competition across increasingly concentrated markets, a notable decrease in new businesses and a consolidation of profits among fewer firms. At the same time, wealth inequality has risen and businesses have invested less. Antitrust policy is pursued to improve the welfare of markets as well as consumers.
In the case of big tech firms, there is significant evidence for monopolistic and anti-competitive activity. A report from the House Judiciary subcommittee released in October 2020 found, among other things, that Facebook deters competition by acquiring or killing competitors and that Apple wields monopoly power over software distribution. There is now relatively widespread support in Congress for better regulation of this sector, and an antitrust movement directed toward the tech industry appears imminent. Such regulation is expected to lead to increased competition and innovation as well as an improved environment for consumers.
But will this signal a rebirth for American antitrust more broadly? The Republican justification for cracking down on monopolistic activity has thus far been case-specific to industries they believe are in opposition to the party. But countless other industries also suffer from a lack of competition today: telecommunications, confectioneries, mattress sales, and lightbulb manufacturing, to name just a few. If the Republican party is able to rekindle the tradition of antitrust sentiment, a desire to promote competition by preventing excesses on the part of major economic players, we could see positive change across numerous sectors.
At this point, belief in such principled change seems overly optimistic. But with stronger regulation of the tech sphere, and as many Americans grow increasingly concerned about these powerful monopolies, we may see the revival of American antitrust. From this odd reshaping of Republican identity, a new dawn of regulation and reform may emerge.
Edited by Neelesh Thakur.
The opinions expressed in this article are solely those of the author and they do not reflect the position of the McGill Journal of Political Studies or the Political Science Students’ Association.
Featured image by Joseph Keppler and obtained via Wikimedia Commons as part of the public domain.