Competition policy can promote a rebirth of independent entrepreneurship in the United States.
The Open Markets Institute focuses on building an economy that provides independent entrepreneurship opportunities for all Americans seeking them. Large corporations have choked off would-be entrepreneurial ventures by dominating markets and unfairly excluding rivals and turning independent business partners into their controlled agents. Historically, the Department of Justice, Federal Trade Commission, and courts enforced and interpreted the antitrust laws to promote entrepreneurial flourishing. They can and should again.
Monopolists and other dominant firms have suffocated their rivals and new entrants through assorted unfair means. Whether through exclusive dealing or predatory pricing, major corporations across the economy have used their market might and financial firepower to stifle the growth of rivals or keep them out entirely. That means fewer opportunities for aspiring entrepreneurs to put their skills, drive, and smarts to good use and develop the next big thing, whether it is in agriculture, energy, or healthcare.
Even in sectors with more independent businesses, many of them are completely dominated by powerful trading partners. In sectors as disparate as fast-food, online retail, and ride-hailing, independent businesses often enjoy little independence in practice. In fast-food, for example, McDonald’s claims its franchisees are independent and markets franchising as an attractive entrepreneurial opportunity. In reality, McDonald’s makes a mockery of independent business proprietorship. It dictates how franchisees do business down to the most minute detail. Its ostensible independent partners, often immigrants and people of color, are effectively its employees, but without the legal rights and protections of employees. This model of corporation domination began in fast food and has spread across much of the American economy.
Antitrust law today thwarts market governance by small and medium-sized enterprises. Thanks to the mechanical prohibition on price-fixing, even small firms cannot come together to set fair prices and reasonable terms of service to ensure market stability. Until recently, federal antitrust enforcers went after businesses for undertaking such market-stabilizing measures contending they represent illegal “collusion.” Markets managed by small and medium-sized enterprises can be far more democratic and publicly accountable than markets controlled by corporate monopolists and oligopolists.
Open Markets has spearheaded the fight to make antitrust law and competition policy instruments for entrepreneurial flourishing. First, we have advocated for strong rules against monopolization and unfair competition through amicus briefs, petitions to federal agencies, and academic and popular writing. Second, Open Markets has also been at the forefront of showing how Chicago School reinterpretations of antitrust law disempowered independent businesses and allowed firms as diverse as Amazon, Subway, and Uber control to control their trading partners through a web of contracts. Through legislation and regulation, competition policy can be remade to promote independent entrepreneurship. Third, we have led the research and advocacy effort for better antitrust enforcement, not simply more enforcement. A program of antitrust targeting independent workers and independent businesses for organizing to build power and govern markets only further disempowers them. The DOJ and FTC should concentrate their enforcement on the powerful, not the powerless. A narrow focus on case metrics ignores the importance of quality enforcement that helps build a fair and democratic economy.
