President Biden’s Competition Order: What it says and should the EU and Ireland copy his homework?
President Donald J Trump brought the US Presidential Executive Order to international prominence. He signed 220 of them. A tiny figure compared to the three-term Depression and Wartime President Franklin D Roosevelt. The concept of the Order goes back to George Washington who signed eight of them.
Some of these Orders can appear narrow, trivial, parochial or even irrelevant. However, many of them matter a great deal and can have a significant impact.
Already, Joe Biden has signed 52 of them in six months, and his 52nd is very relevant for business.
On 9 July 2021, US President Joe Biden signed the "Promoting Competition in the American Economy" Executive Order. It is designed to stimulate competition across many sectors of the US economy.
The measure contains 72 initiatives. The Order spans labour/employment issues as well as sectors such as agriculture, banking, consumer finance, healthcare, technology and transport. Moreover, there are specific measures within sectors so, for example, transport is broken down into air, sea and other modes. It is hoped that the initiative will drive competition leading to benefits for businesses and consumers alike.
President Biden's Order also calls on the Department of Justice, the Federal Trade Commission and more than a dozen other specialist bodies (e.g. the Federal Maritime Commission) to enforce more vigorously the competition laws (or, as they are known in the US, "antitrust laws"). It is quite a wide ranging measure and even covers the possibility of these agencies tackling completed mergers and acquisitions (M&As) where they were problematical. The Order even asks the agencies to review, and revise if needed, their merger guidelines (i.e. the general rule books on how they supervise M&A deals).
The labour or employment issues are interesting because these topics have not proved very significant in a European or Irish context to date. The Order aims to reduce the anti-competitive effect or impact of non-compete and wage-fixing agreements between employers meaning such arrangements could well be banned. However, the Order also deals with trying to prevent regulatory barriers to workers moving between US states (e.g. non-recognition of qualifications) – something which the EU has had to grapple with for almost seven decades and could share its experience with its US counterparts.
There are various sectoral measures in the Order on issues such as rules on airline fares and telling passengers about cancellation fees, prescription drugs for patients, demurrage charges for shippers and so on. There are timetables. Specific officials and institutions are charged with particular tasks.
The Order contemplates not only change in the rules but also institutional change. For example, there will be a new White House Competition Council. It is to be led by the Director of the National Economic Council.
The opening sentence of the Order puts the measure into context:
"A fair, open, and competitive marketplace has long been a cornerstone of the American economy, while excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers."
It is worthwhile reading the Order in full, because it is a well-constructed, prescriptive and directional measure.
Indeed, the obvious question is: should the EU and Ireland emulate the Biden Competition Order?
Should the EU and Ireland have their own Biden Competition Order?
At one level, the EU has been adopting similar measures for many years. The most extensive and dramatic example was the 1992 Internal Market Programme which contained 279 measures to reduce physical, technical and fiscal barriers. The 1992 Programme removed so many barriers and did so very thoroughly. Indeed, the proof of that is in the difficulties over Brexit and Northern Ireland (and the Protocol on Ireland and Northern Ireland) – the dismantling of the barriers was so thorough that reinstating some of them now is painful and difficult. Moreover, the European Commission's Directorate General for Competition has been doing great work on a variety of specific issues over time.
But there is merit in the EU looking now at the Biden Competition Order. The EU does not have to copy all, on indeed any, of it. But there are some ideas which the EU and its 27 Member States could benefit from emulating.
The EU review could be led by the European Commission or by the Member States. The former is often more objective and ambitious. The latter may mean that there would be a greater "buy-in" among those Member States supportive of it. As is often the case with the EU, it might be a combination. It could be a useful initiative for the Member States which will next hold the Presidency of the Council (e.g. France in H1 2022, Sweden in H1 2023 or, but it seems a long time away, Ireland in H2 2026).
Indeed, could Ireland benefit from such an initiative? The Whittaker and Culliton Plans both had positive impacts; is it time for Ireland to follow suit? As it tries to grapple with Brexit and come out of the enormous shock caused by COVID-19, it makes sense for Ireland to set out a visionary plan for the steps which it needs to take to ensure greater competition and prosperity. Indeed, 1 October 2021 will mark 30 years of modern competition law in Ireland – that date marks the entry into force of the Competition Act 1991 – would be suitably commemorated by such an initiative. A short sharp plan could make sense.
This is an "Executive Order" issued by a US President that the EU and Ireland could benefit from reviewing and perhaps emulating at least in part. Moreover, the businesses and consumers of both the EU and Ireland would benefit from whatever targeted measures which could be adopted.
For more information on this topic please contact Dr Vincent Power, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 12 July 2021