July 21, 2020 Originally posted by Open Markets here.
Open Markets Institute filed a petition on July 21, 2020, demanding the Federal Trade Commission ban exclusionary contracting by monopolists and other dominant firms. 30+ public interest groups and scholars signed the petition, including Food & Water Action, the Institute for Local Self-Reliance, and the American Economic Liberties Project.
The petition calls on the FTC to use its unfair methods of competition authority to prohibit exclusionary contracting. Such a ban would have far-reaching effects on monopolies and dominant businesses in this country – from “pharma bro” Martin Shkreli monopolizing the sale of a medicine essential for HIV/AIDS and cancer patients, to Google shutting out search engine rivals, to the Ultimate Fighting Championship controlling the market for professional mixed martial artists. Powerful corporations would no longer be able to block competitors' access to customers, distributors, or suppliers to perpetuate their market control.
Currently, monopolists and other dominant firms across the economy use exclusive arrangements to marginalize their rivals and preserve their power over customers, distributors, suppliers, and workers. In concentrated markets, consumers pay higher prices for lower quality goods and services while workers and other sellers receive lower wages and prices for their labor and products.
“Powerful companies use exclusionary contracts to protect themselves against fair competition and to maintain market dominance. Why should the public rely on long, costly, and complicated litigation and needlessly bear the burden of monopoly, when the FTC can stop all of these practices in one fell swoop?” asked Sandeep Vaheesan, legal director at Open Markets Institute. “We are asking the FTC to put dominant corporations on notice that they cannot use contracts to shut out competitors. Will the FTC choose to protect consumers, independent businesses, and workers, or will it let powerful corporations maintain their stranglehold on numerous markets and industries?”
"Kickbacks are just one way that these companies maintain their stranglehold on the industry - as they amass power and profit, they are literally writing the rules of the game - destroying our climate, putting small farmers out of business, and exploiting workers,” said Navina Khanna, executive director of HEAL (Health, Environment, Agriculture, Environment) Food Alliance. “The high rates of COVID-19 infections that food workers are experiencing today are just one symptom of a rigged system designed to benefit corporations, while leaving communities and the environment at risk."