On July 9, President Biden issued a sweeping Executive Order directing federal regulatory agencies to take a variety of steps that would fundamentally alter the government's regulation of businesses' competitive practices. The Order will have little immediate impact other than to set in motion a variety of proceedings before regulatory agencies. Although most of the executive order is beyond the scope of NATSO members' core policy interests, there are several elements to it that NATSO will engage on:
- Right-to-Repair — The Order directs the Federal Trade Commission (FTC) to address "unfair anticompetitive restrictions on third-party repair or self-repair items, such as the restrictions imposed by powerful manufacturers that prevent farmers from repairing their own equipment." This could result in meaningful policy change that would benefit NATSO members that operate truck shop repair facilities.
- All vehicles built after 1994 must include on-board computer systems to monitor vehicle emissions. As technology advanced these systems became more vital to all vehicles, so repairing cars and trucks is now a high tech operation. Computer diagnostic tools are important in the way that a mechanic's observation and experience is important. This has effectively made OEMs/manufacturers "gatekeepers" of advanced information necessary to repair or supply parts to vehicles. It's created an issue for independent repair shops regarding how much vehicle data the OEMs must provide to independent service centers. OEMs have argued that they shouldn't have to repair proprietary performance information while we've generally held that this creates an unfair marketplace. Biden's FTC has just been directed by the President to examine this.
- Antitrust Issues in Retail — The Order also directs the FTC to investigate "retailers' practices on the conditions of competition in the food industries, including any practices that may violate [the] Robinson-Patman Act" (which prohibits anti-competitive practices by producers, designed to protect small retailers against competition from chain stores by fixing a minimum price for retail products).
- Independent grocers have recently begun actively lobbying on this issue, arguing that in the grocery and broader retail sector, demands from "power buyers" impose disadvantageous terms, conditions and prices on independents. Retail buying power, they argue, has driven increased concentration in the supply chain, reducing alternatives for independent retailers. "Package discrimination," where manufacturers are refusing to provide certain package sizes or promotional packaging to independents while providing them to the WalMart's and Dollar General's of the world, even though consumers often associate such packages with greater value.
- Noncompete Clauses for Employees — The Order pushes the FTC to ban or limit noncompete clauses.
- The effectiveness of this directive will depend on whether regulators devise and carry out the rules in ways that survive legal challenges. Many of these policies are set at the state level, which limits the federal role.
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