As inflation threatens his presidency, President Biden is turning to the federal government's antitrust authorities to try to tame red-hot price increases that his administration believes are partly driven by a lack of corporate competition.
The Agriculture Department has been prodded by Mr. Biden to investigate large meatpackers that control a significant share of poultry and pork markets, accusing them of raising prices, underpaying farmers, and tripling their profit margins during the swine flu epidemic. He encouraged the Federal Trade Commission to investigate accusations that large oil companies had artificially inflated prices even after global oil prices began to fall.
The president has urged the Federal Maritime Commission to look for price gouging by large shipping companies at the heart of the supply chain.
Mr. Biden believes that the rise of corporate concentration in the U.S. economy has allowed a few large players in each industry to raise prices higher than a more competitive market would allow.
Corporate culpability for rising prices is not clear. Inflation is at a 40-year high because of factors such as broken supply chains and high demand for goods from consumers still flush with government-supplied cash. The administration has come under increasing pressure to find ways to respond to the price increases in food and gasoline.
White House officials concede that their antitrust moves are not likely to reduce costs for businesses or consumers immediately. They say the efforts will be more effective down the road. The rise of inflation has given the White House an opportunity to take action that Democrats have long encouraged, and that Mr. Biden made an early focus of his tenure: using the power of government to break up monopolies and promote economic competition.
In July, before the recent run-up in prices, Mr. Biden issued an executive order that included 72 directives for cabinet and independent agencies to more vigorously enforce antitrust laws and to pursue specific actions to promote competition, such as eliminating noncompete agreements for workers and forcing tech companies like Apple to
He has appointed antitrust crusaders to key roles, including the chairwoman of the Federal Trade Commission, and the head of the antitrust division of the Justice Department. The White House brought on a man who advocated breaking up Facebook as an adviser to Mr. Biden on competition issues.
White House officials say fighting inflation was not the initial motivation for Mr. Biden. The push has given the president some of his most powerful tools to take action against rising prices, and it will play a central role in federal efforts to reduce costs for consumers over the long term.
If Democrats lose control of the House or Senate in next year's elections, that role could grow even more prominent as Mr. Biden is forced to rely on executive actions to advance his economic agenda.
Brian Deese, who heads the White House's National Economic Council, said that the administration's focus on increasing competition will lead to more innovation, more disruption, and more start-up businesses in the U.S. He said it will deliver lower prices for Americans immediately.
The president's efforts to promote competition and potentially break up large players have rattled big companies and angered prominent industry groups in Washington, at a time when businesses are already grappling with supply chain problems, higher input costs and labor shortages.
The US Chamber of Commerce accused the Biden administration of interfering with the work of independent agencies even as it threatened litigation against the Federal Trade Commission.
Neil Bradley, the executive vice president and chief policy officer for the chamber, said in an interview that the measures would do little to blunt inflation.
Mr. Bradley said that inflation had been very low in the last decade and that it was a poorly dressed-up political argument. Did they get soft concentration all of a sudden and cause rampant inflation in nine months? Of course not.
The F.T.C., which was given the power to target companies by Mr. Biden, is the focus of much of the business community concern.
An F.T.C. official said that the agency was pursuing its own agenda.
The commission ordered Walmart, Amazon and Kroger to turn over information to help find the source of supply chain disruptions that were hurting competition in the US economy.
The White House arranged for Mr. Biden to meet with a group of retailers the same day to discuss the administration's efforts to relieve port congestion and to highlight the companies' promises that their shelves would be well stocked. Kroger and Walmart officials attended the White House event.
Mr. Biden hosted a group of retailers at the White House to discuss efforts to relieve shipping delays and ensure businesses were well-stocked for the holiday season.
White House officials say they are pleased with the zeal federal agencies have shown for Mr. Biden. Administration officials say the biggest successes so far include blocking the merger of a large American railroad, Kansas City Southern, with a Canadian counterpart, and the merger of two large insurance companies, Aon and Willis Towers Watson, which they say could both have resulted in higher costs for consumers. Hearing aids can be sold without prescriptions, and some gate slots at Newark Liberty International Airport can be auctioned to low-cost airlines.
More dramatic results could emerge from the Justice Department fight against consolidation in the sugar industry and new efforts by the White House's Office of Management and Budget to require that future federal regulations be evaluated, in part, based on how they might affect competition in regulated industries.
$500 million was distributed by the Agriculture Department to help new entrants in the meatpacking industries.
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What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar won't go as far tomorrow as it did today. The change in prices for everyday goods and services is called the annual change in prices.
What causes inflation? It could be the result of increased consumer demand. There are developments that have little to do with economic conditions, such as limited oil production and supply chain problems, that can cause inflation to rise and fall.
Is inflation bad? It depends on the situation. Moderate price gains could lead to higher wages and job growth.
Can inflation affect the stock market? Trouble for stocks is usually caused by rapid inflation. During inflation booms, financial assets have been bad, while tangible assets have held their value better.
According to data from the freight-tracking firm Freightos, the Federal Maritime Commission has investigated a few corporate shipping alliances that have raised prices as much as ninefold during the Pandemic. Daniel B. Maffei, the former New York congressman who is chairman of the commission, said that the rising demand for furniture and other items by consumers who have cut down on travel and dining out is driving the increases.
Mr. Maffei said that the focus on antitrust has given the commission the confidence to investigate other abuses by shipping companies when demand falls and companies try to keep their freight rates artificially high. He said that it has increased his credibility with companies and discouraged anticompetitive behavior.
The meat industry has been the most sustained focus of the administration. A report from the National Economic Council accused the largest meat processing companies of price gouging. The Bureau of Labor Statistics reported that the prices for meat were up 16 percent in November compared with the same month last year.
The report said that the dominant meat processors are using their market power to extract bigger and bigger profit margins. Businesses that face meaningful competition can't do that because they would lose business to a competitor that didn't raise its margins.
The North American Meat Institute accused the Biden administration of cherry-picking economic data. The White House was ignoring the record levels of demand for meat and poultry.
The Meat Institute's president said that the White House Economic Council is showing its ignorant of agricultural economics and the fundamentals of supply and demand.
Tom Vilsack, the agriculture secretary, who held the same position for the eight years of the Obama administration, has been put in the spotlight because of the clash between Mr. Biden and Big Meat. The nomination of Mr. Vilsack was criticized by some agricultural groups because he failed to mount an antitrust effort during his previous tenure and oversaw an era of consolidation in the farm sector. Mr. Vilsack became a lobbyist after leaving the Obama administration.
The Packers and Stockyards Act of 1921 is intended to protect farmers from anticompetitive practices in the meat industry and to promote ways for consumers to buy directly from farmers. The rules were assigned as part of Mr. Biden's July executive order on competition. It has revived the idea that Mr. Vilsack is beholden to big corporations.
The markets have been concentrated for a long time, according to the deputy director of the Thurman Arnold Project at Yale University. He didn't fix it in his first eight years. Why do we think he will fix it?
Kate Waters said the agency was working quickly through the rule-making process. She pointed out that Mr. Vilsack had deployed economic relief money to bolster capacity at small meat processing plants, and that the agency had a new loan program to help meat and poultry processors expand capacity.
The administration is being pushed to target more industries, such as retail and grocery chains, which they say are driving up prices and profit margins.
The Groundwork Collaborative, a liberal advocacy group in Washington, said that the Biden administration understands this and knows it. She said she would like to see more.
