Yes America, Antitrust Laws Do Perpetuate Structural Racism But They Don’t Have To

Yes America, Antitrust Laws Do Perpetuate Structural Racism But They Don’t Have To

1.27.2021

By Brendan Kennedy

The recently named acting commissioner of the U.S. Federal Trade Commission has been very public about her desire to have antitrust enforcement become antiracist. While on maternity leave this summer, Rebecca Kelly Slaughter made her personal opinion known in a public Twitter thread that sparked further discussion about equity within the antitrust community.

Slaughter, along with panelists, Eleanor M. Fox, Deona T. Kalala, Leslie C. Overton and Sandeep Vaheesen, dispelled the notion that antitrust policies were neutral during a session held Jan. 25 by the Antitrust Law Section at the New York State Bar Association’s Annual Meeting. They suggested ways that antitrust laws can stop perpetuating inequality on communities of color.

“There really isn’t such a thing as value-neutral enforcement,” Slaughter said. “All of our enforcement actions have consequences and I would rather have our system be clear-eyed about what these consequences are.”

When talking specifically about racism, Slaughter explained that antitrust laws and enforcement are going to reinforce the structural inequities in our system, specifically in the gig economy.

“We need to think very carefully in all of our cases about whether the actions we take or do not take will reinforce the structural inequities or break them down and make our markets more equitable,” Slaughter said.

According to Vaheesen, the legal director at the Open Markets Institute in Washington D.C., surveys have indicated that the work being done in the gig economy is disproportionately done by people of color. On a larger scale, he believes that antitrust laws have been used to the detriment of Black and brown workers in ways that make our society more racist.

The gig economy is made up of workers like Uber and Lyft drivers, Instacart shoppers and Doordash delivery drivers, whose businesses mainly run on apps. These tech companies have classified their workers as independent contractors, and this can lead to their workers losing some very basic rights.

“These platforms can control and dictate things like rate of pay and commissions and direct trips and routes drivers take,” Vaheesen said. “Due to antitrust laws, these companies have the power of employers without the duty of them, so they don’t have to pay a minimum wage, overtime, workers compensation or healthcare benefits.”

Vaheesen believes that this rise of the gig economy can be tied directly to changes in antitrust law that were enacted in the 1970s and 1980s under Republican administrations and left unchallenged by subsequent Democratic administrations in the 1990s and 2000s.

“Antitrust laws say that workers who are classified as independent contractors cannot organize,” Vaheesen said. “Workers cannot come together and build power through unions, collective bargaining, or striking. So this gives a largely white group of business owners and venture capitalists the ability to control groups of Black and brown workers and prevent them from organizing.”

Slaughter, who has sat on the FTC  as a commissioner since 2018, agrees that the law has been used in this way but said that doesn’t have to be the case.

“I have been vocal to the Department of Labor on the very topic of classifying gig economy workers as independent contractors,” Slaughter said. “From a competition perspective, misclassifying gig workers as non-employees inhibits their ability to compete for better wages and benefits and when viewed through this lens, it’s very problematic.”

According to Fox, the Walter J. Derenberg Professor of Trade Regulation at NYU School of Law, it wasn’t always true that markets would benefit those with money and power. In fact, it was welcoming to outsiders until the 1970s.

“We’ve skewed antitrust laws to benefit the insiders and free up incumbents so they can be more innovative,” Fox said. “Our laws don’t have to be this way and our economics are biased because assumptions are biased.”

Data collection according to Overton, a partner at Axinn, Veltrop & Harkrider  in Washington D.C., and a former senior official in the Antitrust Division of the Department of Labor, is one way we can begin to end structural racism in our antitrust laws.

“There is room for data collection that is more sensitized to these antiracism issues in order to make sure we’re identifying the full range of implications of conduct and company mergers so that we’re not marginalizing already marginalized groups,” Overton said.

The consensus among the panelists coalesced around the notion that antitrust laws could use a reset and restating of their guiding principles. That would include determining whether the goals of such laws is to disperse power or consolidate it.