A Good Start

At the Federal Trade Commision (FTC) Lina Kahn has made the radical step of actually enforcing corporate bribery statutes, which have been ignored by the regulatory body for decades.

About damn time:

This is a weird moment in politics, with obvious dysfunction everywhere. There are mass flight cancellations, shortages of everything from cat food to baby formula to tampons, real wage declines, and an administration that looks out of its depth in so many ways. But in our corner of the world, the political fight to take on monopolies, things are going… well.

I’m going to highlight a bunch of policy actions that happened this week, and how they show that out of the limelight we are slowly turning key parts of the U.S. government around. The most important change is FTC Chair Lina Khan resurrecting an old antitrust law that bars corporate bribery, and using it to attack corrupt middlemen in the insulin market. But while insulin is the immediate target, this law can reach Amazon and a host of other monopolies.

This is a very good thing.


A year ago, Lina Khan became Chair at the Federal Trade Commission, followed a few months later by Jonathan Kanter taking the helm at the Department of Justice’s Antitrust Division. Khan and Kanter are perhaps the most aggressive proponents of antitrust enforcement in decades, returning competition policy to the basic view that when it comes to corporate power, big is usually bad.

This week, three actions will help flesh out what this new enforcement regime looks like practically. First, Jonathan Kanter at the Antitrust Division filed a statement of interest on a court case asking for the narrowing of the antitrust exemption for Major League Baseball. MLB is embroiled in litigation over its choice to eliminate 40 minor league teams, and has been heavily criticized for mistreating minor league players. It was trying to use its antitrust exemption to get the lawsuit dismissed. With this statement of interest, as well as a series of others, Kanter is using his posture as the chief antitrust enforcer at DOJ to shape the law in a more assertive direction.

Second, on Thursday, the FTC voted to resurrect the Robinson-Patman Act, a bill prohibiting corporate bribery and price discrimination by middlemen that hasn’t been meaningfully enforced since the 1970s. I wrote several chapters in my book on the titanic fight in the 1930s to tame chain stores with this law, and the equally vicious conflict in the 1970s to stop enforcing it. The end of RPA enforcement is why chain stores like Walmart and Amazon took over our retail space, and why dominant middlemen control every area of our economy at this point. It’s worth noting that Robert Bork’s most hated statute was the Robinson-Patman Act, and he considered it a tremendous victory that he helped end the enforcement of the law.

So what happened at the FTC? All five commissioners voted on a policy statement saying that the use of rebates by dominant middlemen in the insulin market were a potential violation of different laws under the jurisdiction of the FTC, including the Robinson-Patman Act. This vote is a signal to every private antitrust lawyer, state attorney general, and judge, that the Robinson-Patman Act can once again be dusted off and used.

Insulin is a great test case for this law, because everyone knows how unfair and inefficient the insulin market truly is. It’s a medication that has been around since 1922, and yet it has been increasing in cost every year for decades. And while the three main producers engage in all sorts of schemes to push up cost, most of the high cost of insulin is actually a result the middlemen named pharmacy benefits managers — CVS Caremark, Cigna (Express Scripts), and United Healthcare (OptumRx) — who manage and control how medicine is priced and sold. PBMs demand rebates of up to 70% for the right to have an insulin company sell their product to patients. These rebates in turn massively drive up the price of insulin.


It takes a while to stop a giant ship, turn it around, and get it going in the opposite direction. That’s where we are with antitrust. We started this journey in 2013 or so, and finally got the ship stopped by the end of the Trump administration. Well, the ship has turned around, and it is beginning to move in the right direction. Slowly. But it’s speeding up.

This is the most aggressive antitrust enforcement since (at least) the Reagan administration.

I hope that this is not just a blip,



Husband, father, pinko, slave to cats

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