Biden Exec Order Impact on Small Business

July 14, 2021

Last week, President Biden released an Executive Order, “Promoting Competition in the American Economy” which includes 72 points of action the administration intends to take in promoting economic momentum and tapping down on unfair competition from large, multinational corporations. Among the key provisions of relevance to small business: language in-line with the NSBA-opposed PRO Act; targeted improvements in federal contracting; restoring network neutrality and barring unfair competition through data mining.

In addition to focusing on competition, the Order calls for greater price transparency—a lynchpin for true and fair competition—in a variety of ways including certain health care and drug pricing, internet services, airline fees, agricultural processes and more.

NSBA President and CEO Todd McCracken responded to the Executive Order by stating, “Enhancing competition for our nation’s small businesses and entrepreneurs is a worthy goal, and I look forward to working with the administration to ensure these provisions do just that while avoiding unfair burdens that would stymie small employers’ ability to be uniquely agile in providing jobs and benefits to their workers.”

Below are the key provisions that stand to have the greatest impact on small business.

Labor Issues

With regards to labor issues, the Executive Order will push the Federal Trade Commission (FTC) to ban or limit non-compete agreements and eliminate unnecessary occupational licensing restrictions—both moves intended to increase workers’ economic mobility. The Order also calls on the FTC and Department of Justice to “…strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.”

The Executive Order highlights these labor provisions as complimentary to the Protecting the Right to Organize (PRO) Act, something Biden and the Executive Order urges Congress to pass. NSBA has opposed the PRO Act as it stands to limit employers ability to fairly work with employees on compensation packages and gives union organizers a significant advantage.

Restore Network Neutrality

Back in 2017, the Federal Communications Commission (FCC) voted to repeal net neutrality rules, effectively allowing internet providers to slow down or block access altogether to certain sites, or speed up access to others. Net Neutrality rules had previously required internet service providers to provide equal access to the internet. This Executive Order would reinstate Network Neutrality rules—something that should make it easier for small businesses coming out with a new technology, or product, or company easier and face less unfair competition. NSBA opposed repealing the Net Neutrality rules in 2017 and is pleased to see their reinstatement planned.

Federal Contracting

The Executive Order highlighted the need to “Increase opportunities for small businesses by directing all federal agencies to promote greater competition through their procurement and spending decisions.” Specifically, agencies are directed to examine existing protocols that could limit competition in spending and procurement, as well as ways to improve small-business competitiveness in that process. The Order also requires the Secretary of Defense to file a report within 180 days outlining the state of competition in the defense industrial base, to include areas for improvement of small-business competition where needed.

The Order also includes language calling on the Office of Information and Regulatory Affairs (OIRA) to use its Jan. 20 recommendations that there be “consideration of whether the effects on competition and the potential for creation of barriers to entry should be included in regulatory impact analyses.”

Data Mining
According to the Executive Order, “Over the past ten years, the largest tech platforms have acquired hundreds of companies—including alleged “killer acquisitions” meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions.” In response, the Order encourages the FTC to establish rules on surveillance and the accumulation of data in order to prevent large tech platforms from having an unfair competitive advantage. The Order also calls on the FTC to establish rules barring unfair methods of competition on internet marketplaces.

In addition to the more small-business focused language, the Executive Order will:

  • Lower prescription drug prices through importing drugs from Canada;
  • Allowing hearing aids to be sold over the counter at drug stores;
    Ban internet service providers’ excessive early termination fees and require greater cost transparency;
  • Increase airlines’ fee transparency;
  • Limiting manufacturers from barring self-repairs or third-party repairs of their products; 
  • Allow banking customers to take their financial transaction data with them to a competitor;
  • Stem abusive practices of some meat processors and protect family farmers;
  • Enhance antitrust enforcement efforts in agricultural, healthcare, insurance and tech markets; and
  • Establish a White House Competition Council.