In a bipartisan win for consumers, the Department of Justice is currently reviewing all 1,300 of the nation’s antitrust consent decrees to better align the law with the interests of the public.
Former Reagan staffers Lew Uhler and Peter Ferrara recently wrote a column praising this extensive Justice Department review while noting how some consent decrees were rightfully enacted to protect consumers and, if still existing, must remain in place.
After reading Uhler and Ferrara’s column, I couldn’t help but inject one more significant point on why the implementation of some consent decrees is so important: to mitigate the prevalence of government-caused discrimination.
For decades, consent decrees and the looming threat of federal litigation were the only things stopping certain public entities from engaging in race discrimination. But discrimination of color and background is only one of the forms of bias that consent decrees prohibit. In terms of antitrust, they often prevent companies with monopoly power from engaging in behavior that helps one set of people at the expense of others.
This is especially true in the examples of good consent decrees.
Take the National Wrestling Alliance. Formed in 1948, the NWA engaged in business practices that seem more in keeping with the mob than a “for-profit” venture. The NWA blackballed wrestlers that wouldn’t accept low-ball payments and set up illegal measures to prevent other organizations and venues from hosting competing events. At one point the NWA was a household name – it was the largest governing body in professional wrestling. The NWA had a “World Champion” and hosted events all across the United States and Japan.
Unfortunately, the leaders of the NWA were more interested in enriching themselves rather than promoting the sport of wrestling. Over a decade of federal investigations, the abuses of the NWA resulted in the Department of Justice dragging the NWA into federal court and obtaining a consent decree.
Today anyone can participate in wrestling and competitions happen on campuses and in arenas all across the globe. The DOJ forced the NWA to operate within guardrails that allowed all of the excitement of wrestling without the anti-competitive techniques of the past.
The same could be said of the guardrails accepted by Uhler and Ferrara that are currently restraining ASCAP and BMI, the two largest performing rights organizations in the music industry.
Instead of competing with one another, music publishers join hands through ASCAP and BMI, creating two monopolies that license more than 90 percent of the performance rights to the songs we hear. After engaging in anticompetitive behavior, both companies were put under federal consent decrees in 1941 to ensure the prevalence of fair market rates and prevent discrimination in their rate-setting. ASCAP settling a civil contempt claim with the DOJ just two years ago exemplifies just how disastrous it would be if the Justice Department scrapped the music collectives’ consent decrees this year.
Given that the music publishers have ownership stakes in distribution channels like Spotify, it would not be surprising if, in the absence of these restraints, they colluded together to discriminate in their rate-setting, squeezing out competition by charging less for platforms they have business relationships with.
The Justice Department has a responsibility to ensure the law instills the fair and equitable playing field that the American people deserve. For that reason, it deserves praise for promising to review all the nation’s antitrust consent decrees, many of which provide an unfair advantage to one company, geographic location, or political group. But a failure to maintain a thorough examination of each one could lead to the removal of important consumer protections that prevent discrimination.
Antitrust Subcommittee Chairman Mike Lee, R-Utah, and ranking member Amy Klobuchar, D-Minn., must help guide the Justice Department in the right direction so that consumers will serve to benefit from the decisions that come from the DOJ’s review process. The pure act of doing so would mitigate the possibility of error, ensuring that consumer utility increases by the end of the undertaking.
The public deserves this win, and it is destined to come so long as every actor in the governing and regulatory process does its part.
Horace Cooper is a legal commentator and a senior fellow with the National Center for Public Policy Research.
