Limit Corporate Power

Rein in Corporate Greed


Limit Corporate Power

A well-functioning economy is dependent on healthy and fair market competition. However, across nearly every sector of U.S. economy, from tech to banking to food, just a few companies control most or all of the market. In agriculture, a “get big or get out” federal farm policy has led to fewer farms and farmers and contributed to at least two generations leaving rural communities. Today, many rural communities have only one or two stores, and farmers, ranchers, and other producers have equally few buyers for their goods. The lack of competition means that rural residents face higher consumer prices, lower producer prices, and less choice, while the consolidated business owners – often multinational corporations whose profits are not reinvested in the community – reap the benefits.

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Enforcement of antitrust laws at the federal level could significantly help to lower prices, increase wages, expand choice, and redistribute economic power. A July 2021 executive order from the Biden administration and subsequent related orders have taken important steps to address farmer and rancher market access and competition. While most antitrust action happens at the federal level, state policymakers can pass state-level legislation to address the issue by increasing competition for independent businesses. They can also work with state attorneys general to enforce antitrust laws and to work with federal regulators in the Department of Justice or the Federal Trade Commission to object to mergers and acquisitions.

States can also address specific harms caused by outsized corporate power. For example, often, farm equipment includes a restrictive contract clause that prohibits the buyer from making repairs, instead requiring the farmer to bring the equipment to the dealer, which is much more expensive and time-consuming. “Right to repair” laws prohibit this arrangement, allowing the end consumer to repair their device, whether it is a combine or a smartphone.

Repeal Right to Farm

Agribusiness, pesticide, and timber companies have worked hard to pass laws across the country that protect corporate agriculture and industrial timber at the expense of independent farmers and rural communities. Many of these laws are framed as if they are pro-farmer, sometimes even confusing farmers themselves. State policymakers can help to shift the narrative about who really benefits from these laws and can seek to oppose or weaken them in favor of policies that will increase rural prosperity for all rather than just for agribusiness.

“Right to farm” (RTF) laws were originally established to protect existing farmers from nuisance complaints and legal action from neighbors who may have recently moved to a farming area and been unused to the sounds and smells of a working farm. But in many states, RTF has been turned on its head: these preemption laws are now used to protect new concentrated animal feeding operations (CAFOs) and similar large-scale operations from opposition by existing neighbors. The strictest RTF laws tie the hands of local or county governments by preempting regulation of agriculture or forestry practices, while shielding bad actors from accountability or legal recourse. Despite pushback from rural communities and local governments around the country, RTF laws continue to be promoted and strengthened at the state level. State policymakers can champion opposition to these laws by pushing back against proposed amendments that increase their scope, while helping to shift the narrative of who these laws actually protect: agribusiness and chemical corporations.

Further, while not explicitly called RTF, agribusiness interests in some states have sought to eliminate local control over CAFO siting or other agricultural issues. In states with local control on CAFOs, a county or regional agency has authority to approve or deny a CAFO application based on local conditions. For example, Missouri county health boards long held binding authority over the siting of large CAFOs. After years of attempts by agribusiness-connected state lawmakers to weaken this local control, they passed a preemption law in 2019 prohibiting counties from imposing stricter CAFO standards than the state. Counties and municipalities best know the conditions of their local environment and if their community can sustain a large animal operation; lawmakers in states with local control authority should therefore seek to uphold this authority and resist any attempts to weaken or eliminate it.

“Ag-gag” is the nickname given to a variety of laws seeking to prevent whistleblowers from exposing inhumane animal treatment. Supporters say they protect farmers from bad press, but these laws are promoted by agribusiness interests seeking to avoid scrutiny of animal welfare in CAFOs. More than 20 states have proposed some form of ag-gag law, and six states have approved one. The laws range from outlawing unapproved photos to requiring that inhumane animal treatment be reported immediately (which prevents gathering evidence for prosecution) to criminalizing taking a job under false pretenses (some whistleblowers do this to collect evidence). Newer iterations of these laws have included provisions to criminalize whistleblowers at elder care facilities, veterans facilities, hospitals, and schools. Courts have struck down several of these laws as unconstitutional. State policymakers can champion transparency in the food supply chain and be vocal opponents of these and other laws that effectively conceal elements of the food supply chain from the public.

Policy Priorities

  1. Federal: Rural communities are among the hardest hit by lack of fairness and choice in the market. Rural communities will benefit from passing essential reforms to update and strengthen antitrust policy for the 21st Century. These reforms should include many of the recommendations identified in the House of Representatives report on competition in the digital sector and Sen. Amy Klobuchar’s Competition and Antitrust Law Enforcement Reform Act.

    The Department of Justice and Federal Trade Commission have opened a wide range of investigations and started the process of reforming the rules around corporate mergers and acquisitions.

    The Department of Justice supported poultry farmers to get better pay by effectively ending a deeply anti-competitive payment scheme known as the “tournament” system.

    Congress removed barriers to antitrust enforcement. The State Antitrust Enforcement Venue Act supports state officials to better advocate for fair competition.

    Congress increased funding for antitrust enforcement by passing the Merger Filing Fee Modernization Act which increases the fees companies pay when they propose mergers. This gives antitrust enforcers the resources they need to ensure that corporations don’t hurt working people and small businesses and play by the rules.

    US Department of Agriculture (USDA) empowered State Attorneys General to better enforce competition violations. This initiative reverses decades-long failures to enforce current law and reduces overall enforcement cost.

  2. Federal: Pass the Food and Agribusiness Merger Moratorium and Antitrust Review Act, as an important step towards dealing with extreme levels of monopolization in the agriculture sector.
  3. Federal: Stop corporations from promoting profits over workers by passing the Reward Work Act, which limits stock buybacks, and the Workforce Mobility Act, which prohibits most noncompete agreements that stifle entrepreneurship and trap workers.
  4. Federal: The right to repair is gaining momentum, and the Agriculture Right to Repair Act would empower people to fix their equipment and property without being restricted to an authorized agent. Corporations have used their market power to take away this right by creating restrictive contracts and denying independent repairers access to critical information.

    The President’s order on Competition in the American Economy directs agencies across the Federal government to rein in giant corporations that have unfairly monopolized markets, hurting small businesses and driving up costs for America’s families. A key provision for rural communities, the order encourages the Federal Trade Commission to issue rules for the right to repair.

  5. State: Support enforcement of antitrust laws.
  6. State: Pass state-level “right to repair” laws.
  7. State: Repeal right to farm laws.
  8. State: Stop “ag-gag” laws.

State Examples

  • The New York 21st-Century Antitrust Act (2021 NY S 933A) would update antiquated antitrust laws to shift the dominant power of big corporations back to workers, small businesses, and communities.
  • The Washington State attorney general sued monopolistic poultry companies for conspiracy and price fixing. State attorneys general can also work with federal regulators in the Department of Justice or the Federal Trade Commission to object to mergers and acquisitions.
  • More than 20 states are considering “right to repair” laws, including New York (2021 NY S 149, 2021 NY S 1512) and Oregon (2021 OR HB 2698).
  • While a handful of states have successfully passed so-called “ag gag” laws, judges in North Carolina, Kansas, Idaho and Utah, have ruled the laws unconstitutional.