Vox: America’s monopoly problem stretches far beyond Big Tech

July 15, 2021 Media

I rarely feel more squeezed as a consumer than I do when I fly. For some reason, I now have to pay to pick a seat. Buying the in-flight wifi is equivalent to throwing money in the trash. Flight insurance seems like a scam, but I’m never sure if surprise cancellation or change fees could make it worthwhile. The fee to check luggage, or even bring it on the plane with me, is always inexplicably increasing. A few years ago, United lost my bag for nearly the entirety of a 10-day trip to Nicaragua. (By the end, this trip was very gross.) It took me many weeks and multiple emails just to get back the money I’d paid to check the backpack that arrived at my destination literally the day before I went home.

There are plenty of reasons flying sucks. But one major and constant issue is competition, or rather, the lack of it. Last week, President Joe Biden signed an executive order intended to increase competition. The headlines have largely been about how this affects big tech companies, but the truth is there are monopolies and oligopolies in all kinds of industries.

The “big four” airlines — Delta, American, United, and Southwest — control a large majority of domestic passenger travel in the US. They set the rules of the air, whether that means increased baggage fees (sometimes happening in tandem) or higher ticket prices or an end of service to smaller airports altogether. And because there aren’t enough smaller players that can really compete with them — or stricter rules that, at the very least, make them be modestly less terrible — there’s not much ordinary people can do about it. A shitty flight experience is the only game in town.

It’s a great deal for the airlines; not so much for passengers. Airlines collected $8.6 billion in baggage and change fees in 2019, six times the $1.4 billion they collected in 2007.

On July 9, President Biden signed an executive order on competition (Recode’s Sara Morrison has a write-up of it here) that — if you are a person who cares about antitrust and overly powerful companies — is a pretty big deal. It includes 72 initiatives tackling a broad range of issues and sectors. It orders the Department of Health and Human Services to issue rules allowing for the over-the-counter sale of hearing aids. It pushes the Federal Communications Commission to bar internet service providers from inking exclusivity deals with landlords to offer tenants one internet option. It says that if an airline loses the bag you paid to check, the Department of Transportation should make it give you your money back. The same goes for in-flight wifi if it doesn’t work. The order takes a big swing at empowering regulators looking at the consolidated agriculture industry, and it seeks to put some real teeth into the Federal Trade Commission’s mandate, where new chair Lina Khan is expected to make waves.

“The heart of American capitalism is a simple idea: open and fair competition,” Biden said in a speech discussing the order. “That means that if your companies want to win your business, they have to go out and they have to up their game; better prices and services; new ideas and products.”

The order signals that competition is not a minor issue but instead a major plank of the White House’s political agenda, said Sarah Miller, the executive director of the American Economic Liberties Project, which backs antitrust efforts. “The point of this executive order was to situate it in that context,” she said. “This is something we’ve learned, and we’re rearranging our approach to how we think about the economy in a fundamental way.”