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Democrats Face an Important Anti-Monopoly Test

How the party treats Trump’s pick for antitrust enforcement will speak volumes about its commitment to fighting corporate consolidation.

Joe Raedle/Getty Images

Makan Delrahim, President Donald Trump’s pick to run the Department of Justice’s antitrust division, was about as uncontroversial as nominees come for this administration (and that’s saying something). His confirmation hearing in May was so uneventful, the Senate Judiciary Committee bundled it with two other DOJ nominees; just three senators asked Delrahim questions. Delrahim then sailed to the Senate floor in a 19-1 vote in June, with only Sheldon Whitehouse, a Democrat from Rhode Island, voting against him. On nominations like this, rank-and-file senators usually follow the lead of committees of jurisdiction.

But much has changed in the three months since Delrahim’s confirmation was sent to the full Senate, where it remains today. The fight against monopolies has shifted from a lonely crusade on the left to a major plank within the Democratic Party, whose latest attempt at rebranding, A Better Deal, features a promise to fight corporate consolidation. Thus, Delrahim’s previously uncontroversial confirmation has now become a major test of whether Democrats will live up to their promises.

Delrahim, currently a deputy counsel to the president, fits squarely in the bipartisan mainstream of antitrust policy as it’s been practiced over the past four decades. He was chief counsel to Senator Orrin Hatch, who despite being a partisan Republican has an interesting past on antitrust policy, including skepticism of Microsoft in the 1990s and Google as recently as last year. Republicans and many Democrats support his nomination. Allen Grunes, a former Justice Department official supportive of more aggressive antitrust policy, calls Delrahim “practical” and “creative” and says he would be a good enforcer.

Delrahim would be entering his second month on the job were it not for one senator. When Senate Republicans attempted to include Delrahim in a mass of nominees confirmed by voice vote before the August recess, Elizabeth Warren blocked the maneuver, seeking a larger debate around the nominee—and antitrust policy. “When companies can consume their rival companies instead of competing with them, consumers can get stuck with few or no alternatives—so prices go up, and quality suffers,” the Massachusetts senator had written on Facebook in April, saying that Delrahim represented “the latest edition of the fox guarding the henhouse” and showed how Trump will “put the interests of giant corporations ahead of the American people.”

Both Grunes’s and Warren’s perspectives have elements of truth. Delrahim is a mainstream antitrust figure. Within that narrow range, he might even be decent on enforcement. But it’s also the case that he’s rotated between government service and lobbying on behalf of large corporations.

At Denver-based law firm Brownstein Hyatt Farber Schreck, Delrahim worked for insurance giant Anthem as they tried unsuccessfully to buy competitor Cigna. He’s lobbied on antitrust issues for several other corporations, from drug manufacturer Pfizer to wireless equipment company Qualcomm to pharmacy chain CVS. (In his confirmation hearing, Delrahim vowed to recuse himself from any actions involving former clients of his, including the Anthem-Cigna merger, which is on appeal to the Supreme Court.)

The antitrust bar in Washington has long been a revolving door. Lawyers move seamlessly from defending corporations to deciding whether or not to sue them for anticompetitive conduct. Democrats and Republicans alike allow this because, for the past 40 years, there hasn’t been a lot of difference between the parties on these issues. They share the bipartisan framework that corporate mergers are allowable and even encouraged as long as they promote “consumer welfare” in the form of lower prices. But that framework is collapsing as more Democrats awaken to the threat monopolies pose to American workers and consumers alike.

Scholars have begun to express serious concern about monopolies as the source of numerous economic problems. John van Reenen and Christina Patterson have shown that companies that dominate markets give a greater share of profits to investors than their own workers. The Economic Innovation Group attributed a less dynamic economy, with fewer startups, less mobility among Americans, and more regions of the country left behind, to barriers created by market concentration. Even former Obama administration economists discovered that greater monopolization accounted for the rise in income inequality.

Warren and the Democrats have expressed a willingness to take this on. A Better Deal calls for new antitrust standards, requiring the Justice Department to take into account whether a corporate merger would reduce wages and jobs, lower product quality, or shut down innovation. The new campaign platform also proposes tough post-merger reviews, to ensure that any conditions put on the deals are actually working. “Vigorous, free, and fair competition is a pro-business, pro-consumer, pro-worker approach,” according to a Better Deal white paper.

The authority to change those guidelines rests with the head of the DOJ’s antitrust division. So the Delrahim nomination suddenly puts the Democrats’ credibility on the line. It’s highly unlikely Delrahim would upend the consumer welfare standard. He praised it in this 2003 speech from when he served in the Justice Department under George W. Bush, arguing that “increased use of economic thinking has transformed federal merger analysis.” Analysts at Hughes Hubbard put Delrahim “within the mainstream of the last several decades’ antitrust orthodoxy.” That’s just what Democrats, in A Better Deal, claim to want to break from.

The issue gained new resonance last week, when the New America Foundation fired Barry Lynn and his Open Markets program, the main force in Washington arguing for more aggressive antitrust enforcement. To hear Lynn tell it, his group was marked for expulsion after it criticized Google, a prominent New America donor. But Lynn’s group had worked on monopoly research at New America for over a decade without much resistance from funders, until booking Warren for a 2016 keynote address at a conference about monopolies. This raised attention on the group, and eventually it got pushed out. In other words, it wasn’t criticism per se that unnerved Google; it was the high-profile support such criticism was attracting inside the Democratic Party.

Google has long allied with Democrats, but the New America dust-up—and how it’s exposed additional examples of Google quashing ideas it doesn’t like—has led to Democrats rethinking this partnership. “At issue is a decades-long relationship between Democrats and tech companies, with Democratic presidents signing off on deregulation and candidates embracing money and innovations from firms like Google and Facebook,” The Washington Post’s Dave Weigel wrote on Monday. “Now, locked out of power and convinced that same coziness with large corporations cost them the presidency, Democrats are talking themselves into breaking with tech giants and becoming an antimonopoly party.”

Democrats, bolstered by polling that shows public interest in fighting concentrated corporate power, have increasingly embraced the argument that monopolies can be a destructive force in the economy and democracy. The nomination of Delrahim, an old-guard figure wedded to looking at competition through the narrow lens of consumer prices, offers the perfect opportunity to back up that talk with action. Indeed, Delrahim even lobbied for Google, adding more poignancy to the fight.

A Better Deal was supposed to be a consensus document agreed upon by all factions of the party. Thus, no Democrat should be uncomfortable with voting against Delrahim. And because he needs only 50 votes to win confirmation, which Republicans can provide on their own, this is a somewhat consequence-free test. Will Chuck Schumer, the Democratic leader in the Senate, force a debate and whip his caucus on the vote? Will he take the stand on corporate concentration on the Senate floor that he vowed to take in A Better Deal?

Many progressives rightly question whether Democrats are truly committed to fighting corporate power or whether they’re merely trying to win over Bernie Sanders supporters. Democrats should be able to make an example of a nominee on an issue they claim to be so central to public policy. If not, we can blow off the new attention to antitrust as nothing but talk.