(Bloomberg) — For the first time in three decades, Democrats are officially putting big business on notice: Don’t get too big or too powerful.
The party’s platform committee has added a pledge, not seen since 1988, to go after dominant companies seen as abusing market power. Activists are complaining that a small number of players have been allowed to consolidate too many industries like telecommunications and airlines, leaving consumers worse off.
Encouraged by grassroots groups, think tanks and academics, Democrats from Hillary Clinton to Sen. Elizabeth Warren are borrowing a page from Republican President Teddy Roosevelt’s trust-busting a century ago and are using the issue to tap into the populism that’s fueled Donald Trump’s presidential run.
“This is the most significant antitrust moment that we’ve seen in decades — there does seem to be a real hunger for change, and a growing recognition that our antitrust policy has failed,” said Lina Khan, a fellow with the Open Markets Program at Washington-based New America who studies antitrust and consulted with platform committee members on the document’s language. “That failure is partly responsible for some of the major economic ills that we’re now seeing, from inequality to declining entrepreneurship to declining wages.”
Echoing an exec utive order issued by President Barack Obama in April, the Democratic platform set to be approved at the party’s convention July 25-28 in Philadelphia includes a pledge to make “competition policy and antitrust stronger and more responsive to our economy,” mainly by encouraging agencies across government to take up the cause and toughening enforcement by the Department of Justice and Federal Trade Commission.
The decision to include the language in the document, perhaps inspired by the break-up-the-banks mantra that bolstered Sen. Bernie Sanders’s presidential run, garnered broad support and was the result of a grassroots effort, said Warren Gunnels, Sanders’s policy director.
The language originally pitched by progressive groups to be included in the platform went even further, seeking to create antitrust positions in the administration and to use the government’s buying power to foster competition, according to a draft provided by Gunnels. While it didn’t make it into the final version, the Democrats’ intent is clear.
“We’ve got to break up a number of very large multinational corporations that have a stranglehold on a number of industries,” Gunnels said. “We need more small businesses, medium-sized businesses being given the opportunity to compete and offer consumers more choices and lower prices.”
The Justice Department’s antitrust division is defending its record, citing evidence of stepped-up enforcement since the George W. Bush administration. Under Obama, the division has won 39 merger victories -deals blocked by courts or abandoned following government opposition -compared to 16 under Bush, according to statistics provided by the division. Those include a string of blockbuster deals that have been stopped, like Comcast Corp.’s bid for Time Warner Cable and Halliburton Co.’s planned takeover of Baker Hughes.
The division has also challenged anti-competitive conduct in eight cases, including against Apple for conspiring with publishers to fix prices for e-books. That compares to three under Bush, the department said.
The time may be ripe for the new initiatives: a record number of mergers in 2015, voter angst and wealth inequality — all coming together as they did in the Progressive Era under Roosevelt in the 19th century. Democrats are also seeking to counter decades of conservative economic thought exemplified by the deregulation movement under President Ronald Reagan.
“Everyday voters are very concerned about things like corporate power,” said Mike Konczal, a fellow at the Washington-based Roosevelt Institute. Trump supporters are pushing “views about corporations and outsourcing and global trade that fuels a skepticism about big business and big finance,” he said.
In April, the Obama administration’s Council of Economic Advisers released a rep ort outlining evidence of declining competition across the economy, including data that the biggest firms in numerous industries took a greater share of revenue from 1997 to 2012.