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Education

Competition law in a digital economy

By Matthew Luciani
Global Legal Law Firm This amount is roughly equivalent to the combined assets
of the next 300 banks (see https://tinyurl.com/5fc4b6f8).
ompetition law is a division of law intended
to prevent market distortion caused by anti- The resulting change in policy
competitive business practices. Although more In response to EO 14036, the Department of Justice and
C commonly known in America as antitrust law, Federal Trade Commission issued a joint statement an-
the Biden Administration brought the terminology of nouncing their intention to review federal merger guide-
competition law and its related policies back to the fore- lines and adopt a more rigorous analytical framework.
front of American law when President Biden signed his One initial proposed change was a Notice of Proposed
July 2021 Executive Order Promoting Competition in the Rulemaking in January 2023, seeking to invalidate em-
American Economy (EO 14036), which aims to enforce ployer-employee noncompete agreements by adding “sub-
antitrust laws to tackle excessive concentration, abuses of chapter j” to the Code of Federal Register.
market power, and the negative effects of monopoly and
monopsony. Following the closing of its public comment period, the

Recent developments National Labor Relations Board also issued an opinion
seeking to invalidate such agreements under federal law.
In essence, EO 14036 issues a general policy of the Biden
Administration to combat the recent consolidations of This step by two of America’s largest regulatory agencies
the technology and banking industries. The order seeks a demonstrates their commitment to empowering smaller
"whole of government" approach calling for federal agen- entities and preventing further consolidation in the Amer-
cies to cooperate with each other where overlapping au- ican economy. In fact, the FTC and NLRB highlighted the
thority exists and creates the White House Competition prevalence of non-compete agreements among American
Council within the Executive Office of the President. workers, particularly those earning less than $40,000 year-
ly.
This has had a sweeping impact on the payments industry
because one of the stated purposes of EO 14036 was to pre- The effects on consumers and businesses
vent further consolidation of the banking and technology This policy shift will directly impact how businesses may
industries. regulate their employees' conduct, raising questions about

There has been debate about how the competition laws
and their related enforcement in the United States com-
pare to counterparts in Europe. Although the Sherman
Act was one of the first major, modern competition law As the FTC pointed out,
legislations in the world, its enforcement in these indus- states like California, North
tries has not been strict.
Dakota and Oklahoma already
have prohibited noncompete
According to the White House, over the past four decades,
the banking industry has witnessed numerous mergers agreements, prompting
and acquisitions, resulting in the closure of nearly 10,000 businesses in those states
institutions across the country. to find alternative means of

Since 2006, the Federal Reserve approved over 3,500 bank protecting their confidential,
mergers, leading to the four largest banks (JP Morgan, proprietary information.
Bank of America, Wells Fargo and Citibank) holding about
$9 trillion in assets.

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