The emergence of the anti-monopoly (or “New Brandeis”) movement has been far too limited in mainstream media as a movement consumed by opposition to Big Tech. You see it clearly in Sheelah Kolhatkar’s recent article to take on the move in The New Yorker. Lina Khan, the chairman of the Federal Trade Commission (FTC) and the subject of the story, makes it quite clear that her interest in the monopoly spans a wide range of industries; the list also includes farming, medical supplies, and even chocolate bars. But the only enemies that Kolhatkar highlights in his article are the dominant tech platforms.

Was it just technology. The current $ 1.8 trillion wave of mergers (and that’s just between January and August of this year), besides being a main source of profit for this disproportionate former villain, the mega-banks on Wall Street that handle these transactions, have crossed practically every industry. Not all buyouts are a phenomenon of the tech industry; In reality, much more come from world of private equity. The biggest acquisitions of recent weeks have taken place health care and newspapers. Confusing antimonopoly and Big Tech is a serious category error which ignores and limits the New Brandeisiens project.

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If you want to know how Khan actually approaches his job, take a look at the lawsuit filed last week to block a merger between semiconductor companies Nvidia and Arm, a deal. estimated at $ 75 billion. Not only does this show Khan’s broader interest in taming monopolies, including those that result from vertical combinations of different aspects of production, but the broader interest of the entire committee: the vote of the commissioners of the FTC to go ahead with the lawsuit was unanimous. Despite complaints from pro-monopoly forces that Khan is out of step with decades of stunted bipartisan antitrust practices, in this case she has shifted the establishment, including the two recalcitrant Republicans on the commission, to her reasoning. .

Khan’s interest is not in single-handedly eliminating technological platforms, but in ensuring open markets.

The Nvidia-Arm deal is essential for a number of reasons. We are in the midst of a semiconductor crisis, as the strangeness of the pandemic has left businesses unprepared for an increase in electronics purchases that the current bottleneck could not handle. Shortages have driven up the prices of automobiles in particular, as well as most other devices requiring computer chips.

Nvidia, which started out as a producer of graphics cards for game consoles, has more recently grown into a larger supplier of microchips. Arm, a UK company owned by Japanese equity firm SoftBank, is a leading designer of chips used in a range of products from cell phones to automobiles to data centers. Vendors like Nvidia trust Arm for its licensed designs of computer chips. Until now, Arm has allowed anyone to supply the chips they design (they are known as the “Switzerland” of the industry), but they have never been part of a larger chipmaking conglomerate. .

In other words, Nvidia and Arm are not in competition, but complementary. It’s called a vertical merger, and these types of acquisitions have hardly been challenged in recent years. But common sense dictates why it’s so important for Khan’s FTC to break away from this practice and signal stricter enforcement of vertical mergers going forward.

The fear in this case is that by owning both a large semiconductor supplier and the design company that competing vendors must also use to create their own products, Nvidia could dominate the market and undermine its competition. It is precisely what the FTC supports in his case: that he wants to “prevent a chip conglomerate from choking off the innovation pipeline for next-generation technologies,” as Holly Vedova, director of the FTC’s Competition Bureau, put it.

Nvidia would also acquire invaluable data on its competition, as Arm has licensed chip designs to virtually everyone. Additionally, Arm would be less likely to work with companies working on products that could upend Nvidia’s position in the market, according to this theory.

Since they too depend on chips, some of the big tech companies, like Google and Microsoft, are opposed to this merger and therefore aligned with Khan, although she fought tooth and nail in other contexts. Khan’s interest is not in single-handedly eliminating technological platforms, but in ensuring open markets.

While the trial, before the FTC administrative tribunal, is scheduled for next August, analysts are already saying that they doubt the merger will go ahead. The business press ignored the likely failure, scenting that Nvidia does not need Arm to be profitable and that they benefit historic demand for semiconductors.

Solving the crisis in our supply chain necessarily means solving our crisis of concentration.

But the FTC’s action is part of a larger industrial strategy for semiconductors for the Biden administration, and an example of how competition can play a key role in that regard. The semiconductor shortage had already made policymakers reflect on the insanity of long and concentrated supply chains for such a vital product. Even Nvidia depends on the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chip maker.

A $ 50 billion fund to relocate semiconductor manufacturing is making its way through Congress, but before it’s even passed, things are moving. Ford announced that it develop its own computer chips and turn to domestic supply for them. Samsung recently planned to build a semiconductor plant in Taylor, Texas. It is clear that more chips will be made in america In the years to come. But without competitive markets, the money invested in this relocation will be wasted if the exclusionary behavior and market power of a company like the Nvidia and Arm merger suffocate startups.

In the relocation industry, the administration comes up against perhaps the most powerful force driving both semiconductor production and many other commodities: the financial titans who demand offshoring and labor. cheap labor as a profit-taking strategy. As Garphil Julien wrote recently for Washington Monthly, resilience was sacrificed long ago in favor of an income statement business philosophy, where financiers lead the supply chain location and production strategies of the income statement. manufacturers and retailers. This is why attacking the concentration in semiconductors and other markets also undermines the power of Wall Street.

There is much to be done to reverse the rampant financialization and the depletion of our industrial base. But a big part of that is how well antitrust law enforcement works. We are emerging from a breakdown in the physical supply chain fueled by a pandemic; it is essential to reduce its length and remove bottlenecks. But there is a more synthetic supply chain, engineered into the boards of monopolies, that artificially creates bottlenecks and prevents products other than those they manufacture or finance from reaching the market. The offshoring and monopoly models of the past decades presented a hidden risk that the pandemic exposed and turned that risk into a crisis. Solving the crisis in our supply chain necessarily means solving our crisis of concentration.

This is Khan’s first major antitrust action at the FTC, aside from following up on previously filed cases against Facebook and Google. On this action, she created a rough consensus, with its unanimous support for the agency and even the support of large technology companies. But in its own way, it’s a quietly radical move, both as a salvo against vertical mergers, and as a way to bolster U.S. industrial policy.