- White House issues sweeping executive order on aimed at addressing competition in the American economy
- Several measures related to banking, exporting, agriculture, and independent sales and services could impact small businesses
- Order aims to promote innovation and economic growth, lower prices, and increase workers’ wages
Summary by Dirk Langeveld
A sweeping executive order recently issued by the Biden administration seeks to improve competition in the American economy, and the resulting actions could affect certain small businesses.
The order includes 72 initiatives across a swath of federal agencies. The actions cover a wide range of actions, including strengthening the enforcement of antitrust laws, challenging certain business mergers, restoring net neutrality rules, and efforts to lower the cost of prescription drugs. The stated goal of the order is to “lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.”
The White House says several business sectors have seen power consolidated in a smaller number of large firms, with 75 percent of industries having fewer businesses today than they did 20 years ago. The administration says this allows large businesses to charge higher prices and pay lower wages, with fewer opportunities for small business workers to access markets leading to restricted economic growth and fewer innovative developments.
Areas where small businesses could see an impact from the executive order include:
Banking
The White House says bank closures have become more frequent, with branches typically shuttering as a result of mergers and acquisitions and communities of color more likely to be affected. This, in turn, results in higher consumer costs, restricted small business credit and higher interest rates on approved loans, and challenges in switching banks.
The order encourages the Department of Justice and three agencies responsible for banking to update guidelines on banking mergers and strengthen their scrutiny of mergers. It also encourages the Consumer Financial Protection Bureau to issue rules allowing customers to download their banking data to take with them.
Exporting
One section of the order addresses exports, saying companies that sell their products overseas are often charged hefty “detention and demurrage” fees for cargo before it is loaded or unloaded. The White House is encouraging the Federal Maritime Commission to ensure vigorous enforcement against exorbitant charges on American exporters.
Agriculture
The Biden administration says consolidation in the agricultural sector and the suppliers of key supplies, such as seed and fertilizer, have made it more difficult for independent farmers and ranchers to acquire what they need for their business. The issue has also made it more challenging for them to access markets where they can sell their products. In addition, the White House says consumers can be duped by “Product of USA” labels on meat, since the label can still be applied even if the meat is shipped in from overseas and simply processed stateside.
The Department of Agriculture is being directed to consider new rules under the Packers and Stockyards Act to come up with a plan to increase opportunities for independent farmers and ranchers, and to support alternative food distribution systems such as farmers markets. It will also review rules on standards and labels, including when the “Product of USA” can be used on meat, to make consumers more aware of when food is produced in the U.S.
Independent services
The executive order cites two instances where larger companies have locked out consumers from making their own repairs to products or getting the product fixed in an independent shop. The White House says large agricultural equipment companies use proprietary repair tools and software that automatically shuts down the equipment when a problem is detected and requires a dealer to unlock it. It also says tech companies also use restrictions on the distribution of parts, diagnostics, and repair tools to keep people from making their own repairs or visiting a nearby business to fix products such as cell phones. To respond to this issue, the Federal Trade Commission is being encouraged to issue rules to limit such practices.
The order also seeks to broaden the availability of hearing aids, which are currently only available through a doctor or specialist. Bipartisan legislation passed in 2017 allowed hearing aids to be sold over the counter at drugstores, but no rules were issued for this process. The Department of Health and Human Services is being directed to establish these rules within 120 days.
