RECENT DEVELOPMENTS

Appropriations

• DOJ FUNDING AT RISK.  In 2022, bipartisan congressional members passed the Merger Filing Fee Modernization Act, increasing the fees DOJ Antitrust receives when larger companies merge. But last year, though appropriators capped the amount of fees DOJ could access, Sen. Shaheen (D-NH) committed to removing the cap in the 2025 package. So far, House appropriators are not following her lead. They’ve proposed to cut DOJ Antitrust’s funding by 20% and maintain the fee cap. Economic Liberties joined 37 advocacy organizations in urging House and Senate Appropriations Committees to fully fund the DOJ, eliminate the cap and support their work to hold monopolistic corporations accountable.

Building Worker Power

• NONCOMPETE BAN HITS THE COURTS. Shortly after the FTC finalized a ban on nearly all noncompete agreements that over 60% of Americans support, the Chamber of Commerce and a tax filing company sued to block the rule. Rep. Gaetz (R-FL-01) filed a brief affirming the FTC’s rulemaking authority.  A Fifth Circuit judge has sided with the Chamber—for now. The court will issue a final decision on August 30th, days before the rule would take effect nationwide. A decision on a challenge to the rule in Pennsylvania is expected by July 23rd.

Airlines

• WILL BOEING PAY? In 2021, DOJ negotiated a deferred prosecution agreement (DPA) with Boeing for fraudulently withholding information related to the 737 Max crashes that killed 346 people. But the Alaska Airlines door plug incident and whistleblower disclosures have shown Boeing’s safety troubles continue. This spring, DOJ found Boeing violated the DPA and congressional members grilled CEO David Calhoun for not prioritizing safety. The victims’ families wanted DOJ to take the aerospace giant to court, but Boeing is likely to settle, pleading guilty to a criminal felony and paying a $243M fine. A Texas federal judge must still approve what the families are calling DOJ and Boeing’s “sweetheart” deal.

Reining in Big Tech 

• SCOTUS SENDS BIG TECH BACK TO COURT. As federal big tech legislation stalled in Congress, states began implementing laws of their own. Texas and Florida passed laws to limit how Big Tech companies could moderate content. In response, Netchoice, dubbed Big Tech ‘s top political lobbyist, sued citing First Amendment violations. The Supreme Court sent the cases back to lower courts on procedural grounds. Economic Liberties Senior Fellow, Zephyr Teachout, explains in The Nation why this opinion might actually be a good sign for the constitutionality of state laws protecting children from social media.
  ‌
• IS YOUTUBE PLAYING FAIR? In March 2024, YouTube accounted for nearly 10% of all TV viewing, the highest of any streaming platform ever. 9 out of 10 teens use the platform, more than TikTok.  Advocates led by Economic Liberties claim YouTube has reached this popularity illegally and are urging DOJ to investigate. For example, they cite YouTube being automatically downloaded on smartphones and TVs as potentially anti-competitive.

Improving Health Care

• UNTANGLING PBMs’ TWISTED WEB.  According to a new FTC report, the top three PBMs pocketed $1.6 billion in revenue off only two cancer medications in just three years and account for 20% of all healthcare expenditures, inflating healthcare costs and pressuring independent pharmacies out of business. The report likely foreshadows a lawsuit against the top PBMs—United Health’s Optum, Cigna’s Express Scripts, and CVS’s Caremark—for using rebates to inflate insulin prices. Separately, bipartisan congressional members are demanding answers from the Department of Defense for extending an exclusive contract with Express Scripts to manage TRICARE—service members’ pharmacy program, which they claim raises taxpayer costs and limits the military’s access to independent pharmacies.
  ‌
• HOSPITAL MERGER PUT ON ICE. Novant Health & Community Health systems operates seven acute care hospitals near Charlotte, NC, and was attempting to acquire two more, which would have given it control over 65% of the market. The FTC sued to block the $320M deal, alleging it would raise prices and reduce quality of care.  After a Fourth Circuit appellate upheld the challenge, Novant and CHS abandoned the merger.

Promoting National Security

• CHIPS ACT OVERSIGHT. The landmark CHIPS Act designated $52B to spur domestic semiconductor chip manufacturing. Large corporations like Intel and BAE Systems have already received subsidies, and are simultaneously spending billions on stock buybacks. Sen. Warren & Rep. Jayapal are calling on Commerce Secretary Raimondo to enforce the law’s prohibition on stock buybacks by CHIPS Act recipients. Economic Liberties is also pressing Senate Commerce to create sufficient domestic demand for future U.S.-made chips and consider other competition concerns.

Blocking Mergers

• CONCERNS UNDER THE MATTRESS. Since 2023, Tempur Sealy, the world’s largest mattress manufacturer, has been trying to acquire retail giant Mattress Firm for $4B. In a unanimous, bipartisan vote, the FTC moved to block the acquisition, citing evidence Tempur Sealy planned to lay off workers and prevent competing manufacturers from selling in Mattress Firm’s over 2,000 stores.  A Texas federal court will decide whether the case can proceed.

Housing

• FICO AND CREDIT REPORT PRICE HIKES. Checking a borrower’s FICO score and credit reports is a common step for lenders before approving a mortgage, and a required one for loans sold to Freddie or Fannie Mae. Bankers are claiming Fair Isaac Corporation, the company that sells FICO scores, and the big three credit reporting companies—Experience, TransUnion, and Equifax—are using their market power to hike prices by as much as 500% since 2022, leading to higher consumer closing costs. They’re calling on the CFPB and Federal Housing Finance Agency to take action to lower prices. Sen. Hawley (R-MO) also has urged the DOJ to investigate FICO for anti-competitive practices. The CFPB is requesting information on fees paid during the home-buying process until August 2, 2024.

Lowering Prices

• ADOBE‘S TRICKS AND TRAPS. Adobe earned a majority of their revenue from subscriptions in 2023, but a new FTC lawsuit suggests this revenue was in part driven by trapping customers in yearly contracts and charging hidden, early termination fees when they tried to cancel. The suit charges both the company and two executives for this deceptive conduct. Last year, the FTC proposed a “click to cancel” rule to force companies to operate fair cancellation processes for consumers.
  ‍
• DOMAIN NAME DRAMA AT COMMERCE. In the 1990s, the Commerce Department’s National Telecommunications and Information Administration (NTIA) has contracted with one company–Verisign– to manage the registry of .com internet domain names and determine how much businesses and consumers pay for sites. Since then, Verisign has hiked prices by 70% and now is one of the economy’s most profitable public companies. NTIA now has the opportunity to end its contract with Verisign by August 2nd and begin injecting more competition in the market, a step Economic Liberties has urged they take.

ICYMI

• The FTC is reportedly investigating the largest dialysis providers in the U.S., DaVita and Fresenius Medical Care, for using noncompetes to thwart competition.
  ‌
• A jury sided with the DOJ and convicted two executives of conspiracy to price fix and bid rig ready-mix concrete in Georgia and South Carolina.
  ‌
• The CFPB finalized a rule creating a registry that large, non-banking financial institutions, such as mortgage companies, must report after receiving a final enforcement order from a government entity.
  ‌
• eBay will no longer accept American Express because of “unacceptably high fees” for processing credit card transactions. Check out lowercreditcardfees.com to learn more about how swipe fees are killing small  businesses.
  ‌
• Speaking of swipe fees…a judge rejected Visa and Mastercard’s $30 billion settlement, advocates claimed that the settlement terms did not provide real relief from swipe fees.
  ‎‌
• Sen. Klobuchar (D-MN) introduced a bill that would require private equity firms to notify antitrust authorities when purchasing a large number of single family homes.
  ‌
• A judge decided the DOJ’s case against Google for monopolizing digital advertising will go to trial beginning September 9.
  ‌
• Google is also pursuing its biggest acquisition ever in trying to buy Wiz, a cybersecurity company.
  ‌
• The House passed the 2025 NDAA bill with competition-related amendments from Rep. Gluesenkamp Perez and Rep. Doggett.
  ‌
• House Natural Resources Committee Democrats sent a letter to the Department of Interior requesting information on Pioneer Natural Reserves and seven additional oil companies’ role in price fixing with OPEC.
  ‌
• The FTC is rumored to be filing a lawsuit soon against Southern Glazer Wine and Spirits for violating the Robinson-Patman Act.

BRIEFINGS & EVENTS

• On July 19, the Federal Reserve and Office of the Comptroller of the Currency are hosting a virtual public hearing on the proposed Capital One-Discover merger. Register here.