Expanding War on Junk Fees
To further protect American consumers, the White House broadened its initiative to combat junk fees within the rental housing industry on Wednesday. In addition, a new effort to thwart price-fixing in the food and agriculture sectors was announced, along with the introduction of draft merger guidelines. All these measures form part of a wider strategy aimed at supporting US consumers against anti-competitive business practices.
Biden’s Ongoing Attack on Corporate Greed
The actions announced by the Biden administration represent its continuing attack on corporate greed, a key element of President Biden's agenda. These were discussed in the fifth meeting of Biden's Competition Council, a body designed to scrutinize anti-competitive practices. The council was formed under an executive order two years ago and has since been instrumental in combating an economic philosophy that, over the last four decades, has led to increased industry concentration and costs for US households.
Impacts of Concentrated Market Power
A rise in industry concentration in nearly 75% of U.S. sectors has financially strained the median American household, costing them up to $5,000 annually in increased prices and lower wages, according to the White House. Hannah Garden Monheit, recently appointed director of Competition Council Policy at the National Economic Council, stated that the administration is committed to using all available tools to combat these anti-competitive practices. However, this increased scrutiny of business practices has been met with backlash from the industry, citing 'regulatory overreach.'
Promoting Competition in the Economy
Advocates, such as Morgan Harper, a former Consumer Financial Protection Bureau official, argue that Biden's push for greater competition is crucial for small businesses and entrepreneurs. They maintain that strong government enforcement is necessary for a truly competitive marketplace. Concerns about market concentration damaging workers, small businesses, and consumers highlight the need for this government intervention.
Curbing Hidden Fees in Rental Housing
The new measures aim to curb hidden fees in the rental housing sector. Three major rental housing platforms - Zillow, Apartments.com, and AffordableHousing.com - have agreed to provide upfront data on rental costs, including application and "convenience fees." While this move may not directly reduce fees, it should enable better comparison shopping for renters, increasing transparency, and potentially driving fees down.
New Merger Guidelines and Antitrust Actions
Additional actions announced on Wednesday involve draft merger guidelines designed to tighten scrutiny on large tech companies like Amazon and Google. These guidelines aim to eliminate "blind spots" that have led to increased market consolidation. Also, in an attempt to target price-fixing in the food and agriculture sectors, the White House, the Department of Agriculture, 31 states, and Washington, D.C., have announced coordinated actions. This is an important step towards preventing anticompetitive behavior in these heavily consolidated sectors.
