Anti-monopoly movement: states can take the lead

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Several weeks ago, President Joe Biden signed an executive order that included 72 initiatives across the federal government aimed at tackling the US monopoly problem. Biden’s executive action is the first concerted effort to combat concentrated corporate power in decades. While anti-monopoly, especially antitrust, is often seen as work for the federal government, Biden’s order recognizes the key role the state government could and should play in reducing corporate stranglehold. monopolists.

Today, in an era of rampant economic concentration that crushes workers, destroys small businesses, and distorts our political system, states like Minnesota can lead the way in opposing corporate power. Minnesota has done it before. In 1871, as the Minnesota Grange movement was beginning to gain momentum, the legislature faced the most significant monopolist of the time by establishing tariffs and maximum tariffs for railways and establishing the office of the Commissioner of railroads. La Grange then created the Minnesota Anti-Monopoly Party in 1873 and, with the help of the Democrats, won legislative seats in 1874. These electoral victories led to the creation of a railroad commission as lawmakers state continued the work of limiting monopoly power.

Action in New York, Wyoming …

Justin stofferahn

Looking to the present, states are once again ready to lead the way. Last month, the New York State Senate passed a revolutionary overhaul of its antitrust laws. The 21st The Century Antitrust Act would set a broader standard for the enforcement of antitrust laws based on a company’s ability to dominate markets, instead of the much narrower standard of consumer welfare. Prior to that, Wyoming increased the fines businesses will incur for violating antitrust law, while state attorneys general have filed lawsuits against Google, Facebook and Amazon.

Beyond changes to antitrust law, state lawmakers across the country have pushed forward anti-monopoly policies that target today’s main monopolist, Big Tech. This spring, several states, including Minnesota, introduced legislation that would break Google and Apple‘s duopoly on smartphone app development by allowing customers to use alternative app stores for app distribution and cap eviction fees (up to 30%) charged to developers. .

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Assessment of subsidies and tax exclusions

States are also re-examining tax policies that have helped big business gain economic control. Big Tech has grossed billions of dollars in state and local tax subsidies and exclusions, such as the Minnesota sales tax exemption for data centers, which costs nearly $ 100 million a year! Research suggests that these incentive programs are little more than a black hole of corporate largesse. Some policymakers are finally realizing this corporate abuse and trying to end these programs, while others have joined efforts to establish an interstate tax pact that would limit the use of corporate gifts. Minnesota would be well served to join these other states and examine how taxpayer funds are used to improve Fortune 500 business results.

The workers are also in the crosshairs of the monopolies. Highly concentrated labor markets drive wages down, with Amazon’s warehouses being a particularly vivid example of monopoly power putting the screws on working families. One tool used to accomplish this wage suppression are non-compete agreements, which are restrictive covenants prohibiting a worker from taking a job in a competing company. The Economic Policy Institute has estimated that 27.8% to 46.5% of workers are subject to non-competition! States like Illinois, Nevada, and Oregon recently passed legislation limiting these coercive contracts.

Consumers are not immune to the evils of monopoly power. For example, manufacturers like Apple and John Deere prevent consumers or independent repair technicians from repairing items like smartphones and tractors. This forces consumers to buy a new product or send the device to the manufacturer itself, driving up prices and destroying entrepreneurial opportunities for freelance technicians. In recent years, lawmakers in Minnesota and across the country have introduced legislation that would break this monopoly power and grant consumers the “right to fix” the things they own.

Apple and Google add lobbyists

As lawmakers, including some in Minnesota, begin to understand the toolbox available to reduce corporate power, the fate of many of these bills underscores the challenges ahead. Just days after Minnesota lawmakers introduced the App Store legislation, Apple and Google each added three new lobbyists. The bills then went nowhere. In North Dakota, Big Tech lobbyists persuaded the Senate to vote against similar legislation, and in Arizona, as app store legislation passed the House, it went nowhere in the Senate after Apple and Google “hired almost every lobbyist in town.”

The proposals outlined here are just a few of the ways Minnesota can rebalance its economy. What is needed, more than political ideas, are decision-makers willing to challenge corporate power and think creatively about the role state government can play. It will require an electorate that presses candidates, at all levels, on their plans to confront corporate power and restore competition. Minnesota made anti-monopoly cool over a century ago; he can do it once more.

Justin Stofferahn lives in the Township of White Bear and is a public affairs professional who has worked on various tax and economic development issues. He was a candidate for the Minnesota State Senate in 2020 and can be contacted at www.justinstofferahn.com.

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