Executive VP & General Counsel, American Water Works
Stacy Mitchell – Democracy vs. Big Tech: How We Can Win the Fight Against Monopoly Power
Most of us would like to live in a society accountable to people and the planet, one in which we exercise genuine agency over our lives and have a real say in the decisions that affect our communities, but the dramatic increase in corporate domination, especially the rise of giant tech companies that wield unprecedented levels of surveillance and control, is radically undermining our democracy and concentrating wealth and power in fewer and fewer hands. Stacy Mitchell, who has long been at the forefront of the national movement to rein in excessive corporate power and reinvigorate local self-r...
About Stacy Mitchell
Stacy Mitchell, co-director of the Institute for Local Self-Reliance, has been a prominent voice in the anti-monopoly movement, arguing that the consolidation of corporate power undermines democracy and economic opportunity. In public appearances throughout 2024, she stated that the roots of this concentration lie in a decision made 40 years ago to abandon antitrust enforcement, a shift she attributed to the influence of legal scholar Robert Bork. Mitchell has described a growing political coalition against monopolies, noting that majorities of both Democrats and Republicans view large corporations negatively, and she has pointed to alliances between labor and small businesses as evidence of a broad-based movement. She has cited specific examples of corporate power, including Amazon's control of online shopping traffic and its practices toward third-party sellers, as well as the role of Google and Meta in capturing advertising revenue that once supported local journalism. Mitchell has also highlighted recent federal actions, stating that President Biden repudiated the experiment of allowing corporate consolidation and that the Federal Trade Commission has taken steps such as proposing a rule to ban non-compete clauses. She has characterized the anti-monopoly movement as essential to democratic governance, arguing that economic liberty is crucial to political liberty. In her testimony before the House Judiciary Committee in 2019, Mitchell advocated for structural separations between platform operators and the businesses that rely on them, as well as for non-discrimination rules and stronger merger enforcement.
Transcript (19 segments)
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Stacy Mitchell0:12
I want to start with the paramount question of our times: how can we as a country find the ability to govern ourselves? How can we make decisions collectively? How can we solve our problems? How can we save ourselves before it's too late? I want to suggest to you today that the roots of this predicament lie in a decision made 40 years ago, when leaders of both political parties agreed to abandon our anti-monopoly laws, laws that for generations had checked corporate power. This decision was sold to us on the grounds that it would create a more efficient economy, that it would be good for consumers. It was sold to us, in other words, as having nothing to do with power.
We wait helplessly while the insurance company decides whether to approve a treatment. We watch helplessly as the social media giants rob our children of their self-worth. We submit to abusive employment conditions and pervasive surveillance. Across the country, urban and rural communities alike find themselves at the mercy of distant boardrooms, their local businesses disappearing, their futures no longer theirs to control. Is it any wonder that democratic institutions are seen by many as illegitimate? Across this land, we all know that the actions of government more often reflect the priorities of corporate executives than the needs of citizens.
But the reason I'm here today is not to talk about something that you probably already know, but to draw your attention to something that you might not have noticed. There is an incredible, growing anti-monopoly movement across this country that is making real strides in resurrecting our antitrust laws. This movement stretches from the grassroots to the highest levels of government, where leaders of key agencies are dusting off long-dormant antitrust laws and using them to rein in corporate power and expand the freedom and agency of ordinary people. This movement is shaking up the political map. It's fostering new alliances between labor and small businesses. It's energizing people in ways that I haven't seen in my entire career.
I don't know if this movement can outrun the forces of authoritarianism, but I think it's the best chance we have, which is why I'm here. We need you. We need you to join us. So what happened 40 years ago? To understand that, we need to understand the origins of our antitrust laws. Antitrust is essential to democracy's basic design. Just as we have checks and balances to prevent any one branch of government from wielding too much power, anti-monopoly laws prevent the accumulation of economic power. The notion that economic liberty is crucial to political liberty is an idea that originated on this continent. As Chief Justice John Marshall explained, English colonists learned this concept from the Haudenosaunee people of the Northeast, whose ideas infused the American Revolution.
The founders understood that tyranny could take many forms, not only in the form of a king, but it could also manifest as a global corporation. After the revolution, restrictions on corporate power were embedded in state laws, but that approach broke down in the 19th century when a group of men harnessed a disruptive new technology: the railroad. Control over the rails meant control over who could access markets. If you could monopolize the rails, you could monopolize every other industry. JD Rockefeller built a monopoly in oil in part by conspiring with Cornelius Vanderbilt to ensure that Standard Oil's product moved on the rails while its competitors were sidelined. The railroad giants also used their power as gatekeepers to impose exorbitant fees on farmers and small businesses.
This led to the passage of our first antitrust laws. The central purpose of these laws was to protect everyday people from concentrated economic power, or what Franklin Roosevelt would later call industrial dictatorship. Indeed, it's FDR who gets credit for fully activating our antitrust laws. He campaigned on a promise of economic freedom for the wage earner, the small business, and the farmer. He launched a period of aggressive antitrust enforcement that lasted for decades. The government blocked mergers, filed monopolization cases, and periodically broke up companies for several decades.
To get a feel for what this meant in practice, we might look at the case of A&P, the dominant supermarket chain of its day. A&P used its power to drive small grocers, local grocers, out of the market. As it amassed market power, it became increasingly abusive towards its workers and the farmers that supplied it. The government filed suit and ultimately won that case, putting an end to A&P's predatory tactics and forcing the company to spin off parts of its operation. A&P didn't disappear; it continued to operate for decades, but it could no longer bully and dominate. The results were striking. With A&P back on its heels, its workers were finally able to form unions. Farmers had more leverage and were able to negotiate better prices. Crucially, independent grocery stores flourished, accounting for more than half of all grocery sales.
This was a period that rested on two forms of economic agency: the right to bargain collectively and the right to strike out on your own and start your own business, free from being crushed by a monopolist. Now, this was a period also of systematic discrimination and exclusion of Black Americans, gay Americans, and women. But it's notable that the income gap between Black and white Americans narrowed considerably in these decades. Black people joined unions in record numbers, and Black-owned businesses grew and multiplied. Indeed, in 1969, there were more Black-owned grocery stores than there are today. These businesses played a pivotal financial and organizing role in the civil rights movement.
But then the Democratic Party began to turn away from its anti-monopoly roots. It became increasingly beholden to Wall Street and distanced itself from farmers and small businesses. And then in 1978, Robert Bork, yes, that Robert Bork, who you might know as Nixon's solicitor general and later failed Supreme Court nominee, but whose shadow over our lives was cast much more profoundly by this incredibly influential book that he wrote, in which he declared that the antitrust laws had nothing at all to do with questions of power and liberty. Their sole purpose was to maximize efficiency and to lower prices. Big business saw an opening, and Bork's followers swept into power with Ronald Reagan.
What followed was something akin to a coup. The Reagan administration appointed judges and enforcers who simply ignored the plain language of the statutes. They ignored the clearly expressed intentions of Congress and declared that antitrust had one goal: to lower prices. They also insisted that big companies were naturally more efficient, and therefore we should welcome consolidation. They turned antitrust on its head. All of this might have been undone after Reagan, except that Clinton and later Obama embraced broadly similar thinking. I came to this issue in the late 1990s when I took a job at the Institute for Local Self-Reliance, the organization that I now co-lead. One of my first assignments was to look at why local retail businesses were closing in droves.
The answer I found was that Walmart was using its power. It began to strongarm suppliers. It would say, 'You're going to give us lower prices, better terms, more access, while you charge higher prices to the local grocer down the street.' I remember thinking, 'Don't we have laws against this?' So I started looking into antitrust, and sure enough, in 1937, Congress passed a law that prohibits big retailers from exploiting their control over suppliers to undermine their smaller competitors. I found that in 1950, having witnessed how monopoly control of industry fed the rise of fascism in Germany, Congress passed the Anti-Merger Act, a law designed to stop mergers. Reading these laws was like entering into an alternate universe.
Today, supermarket chains get together with food conglomerates like ConAgra and Tyson to create a choke point in our food system. They are driving down the incomes of farmers and food workers while jacking up prices to consumers. It's the same story everywhere. Over the last 20 years, big hospital chains have bought and closed one quarter of the nation's hospitals, with dire consequences for rural, Black, and Indigenous communities. Meanwhile, if you live in a metro area where the hospitals have merged, not only do prices rise, but mortality rates go up for patients. Electric utilities have been on their own merger spree and are now using their enhanced market power to thwart the spread of distributed solar.
Extreme inequality was one spark that led to today's anti-monopoly movement. The other was the dawning realization that concentrated corporate power is a form of tyranny. All those years we worried about big government, big business was taking over. The realization finally came with the rise of big tech. The tech companies have followed the exact same playbook as the railroad barons: gain control of the underlying infrastructure of commerce, use your power as a gatekeeper to privilege your own interests, crush your rivals, and extract tribute from everyone else.
You've read the articles. It's that Meta and Google are pocketing all of those ad dollars. Amazon controls two-thirds of online shopping traffic. That means virtually every business that makes or sells any consumer product has two choices, and both are usually fatal. You can either decide not to sell on the online market, or you can sell on Amazon's platform. To sell on Amazon is to be subject to the tech giant's bullying, its tendency to copy your best-selling products, its arbitrary algorithm changes that can tank your business. Ten years ago, small businesses selling on Amazon paid Amazon fees equal to 14% of their sales. Today, Amazon is pocketing half of every dollar they earn.
Amazon controls the infrastructure of online commerce. It controls the search results. It has the power to regulate, to punish, to tax. This is a governing power we cannot let them have. Amazon is extending its tentacles in every direction. Its package delivery operation is now bigger than that of the US Postal Service and threatens to supplant it. Its cloud division powers much of the internet. It's advancing into health care and finance. It's selling surveillance and AI technologies to police and military outfits around the world. You may recall that in 2017, Amazon launched a sweepstakes in which cities offered billions of dollars in subsidies to win the company's second headquarters. Mayors across the country created videos in which they bowed down before Jeff Bezos.
But if you were paying close attention, if you were reading those protest signs, if you were listening in those city council meetings, there was this curious word that kept coming up, this long-lost word. That word was monopoly. It was one of the first green shoots of a budding anti-monopoly movement that quickly began gathering converts: labor leaders, small business groups, community activists, academics, members of Congress. And to the surprise of many, including me, one of those converts was Joe Biden. A few months into his presidency, he gave a pivotal speech in which he declared that we had to restore competition to the American economy.
He appointed Lina Khan at the head of the Federal Trade Commission, Jonathan Kanter at the DOJ's Antitrust Division, and Tim Wu at the National Economic Council. They have now blocked dozens of mergers, putting a stop to the tide of runaway consolidation in book publishing, airlines, hospitals, and supermarkets. They filed monopolization cases against Amazon, Facebook, Google, and Apple. These cases are not about making small fixes on the margins. They aim to fundamentally restructure dangerous business models. The FTC is also using its responsibility under the law to ban unfair methods of competition. Its first move is a rule that would ban non-compete clauses, which ensnare one in five US workers.
What these leaders are doing is incredibly popular. Three-quarters of both Democrats and Republicans believe that large corporations are having a negative impact. More than that, anti-monopoly has a real, live political base. Ranchers and slaughterhouse workers are urging action against meat packers. Small business groups have joined with warehouse workers to demand a breakup of Amazon. Farmers and nurses and patient groups are fighting healthcare monopolies. With roots in both blue and red America, these voices are one reason that the US Chamber of Commerce, try as it might, has been unable to gain any traction in Congress to try to put a stop to what these leaders are doing, to what we are doing.
Here is what I want to leave you with today. For 14 long years, the north side of Tulsa, Oklahoma had no grocery store. And then AJ Johnson, here on the right, opened Oasis Fresh Market. It is beloved in the community, but Oasis struggles to survive because it has to compete against a monopoly. Imagine if we had antitrust laws that actually worked. Imagine if we took our healthcare system out of the hands of monopolists. Imagine if we took the corporate boot off the neck of rural America. Imagine if we fixed the internet. This is what democracy looks like. It looks like government taking seriously its obligation to check economic power. It looks like all of us building the country, the economy, the future we want. We can win this, but we need you. We need you to tell your friends. We need you to join this fight.