On July 9, President Joe Biden signed an executive order aimed at “promoting competition in the American economy.” It’s a big goal, and it’s a big executive order, consisting of 72 different initiatives across a dozen federal agencies.
Beefed-up antitrust enforcement is the administration’s focus. Whether cracking down on corporate mergers and other allegedly monopolistic behavior will benefit American consumers, workers and small business owners remains to be seen. But three of the smaller items on Biden’s competitiveness agenda, all actions by the Federal Trade Commission, deserve unqualified praise: a limit or ban on noncompete clauses in employment contracts; a crackdown on excessive occupational licensing requirements; and protection of consumers’ “right to repair” their own phones and other devices.
Now that there is software in almost everything, the “right to repair” goes far beyond iPhones and other tech toys. Farmers are often locked out of repairing their own tractors, and hospitals can’t fix their own medical equipment.
The right to repair is fundamental to one of the Central Coast’s most successful tech startups. Kyle Wiens, a Cal Poly San Luis Obispo graduate, founded iFixit in 2003 with a simple idea: give people the tools and information they need to repair their own devices. The company is still based in San Luis Obispo and now has a staff of around 150.
On July 13, Wiens wrote an op-ed column for the Washington Post that describes some of the obstacles businesses like his face. One notable exception, Wiens wrote, is the automotive repair industry. The codes for check-engine lights and other error messages in modern vehicles were once tightly guarded by manufacturers, but after states started to pass automotive right-to-repair laws, carmakers agreed to share their diagnostic information.
Now independent mechanics can compete with dealers, and the businesses and consumers are all better off. There’s no reason to think the same principle won’t apply to Apple or John Deere.
Biden’s executive order also targets what the administration calls “overly burdensome occupational licensing requirements.”
Nearly 30% of jobs in the United States now require some sort of government license, up from less than 5% in the 1950s, according to a Biden administration fact sheet. Many of these licenses are essential, like those in the medical field, but others are clearly excessive. As an example, Biden has pointed to states that require hundreds of hours of experience for hair stylists.
Biden is asking the FTC to ban the most burdensome regulations, and make it easier for people to move their licenses from one state to another. This is especially crucial for military families, Biden has pointed out — in communities like Port Hueneme, which is next to Naval Base Ventura County, military spouses often do work that requires licensing and also move frequently from state to state.
Finally, Biden wants to end noncompete clauses, which are distressingly common in American business. We say “distressingly” because any infringement on a worker’s right to start a business or find a new job is a serious matter, and because noncompetes are common even in industries where workers are unlikely to take trade secrets with them, such as retail and fast food.
But even in knowledge-heavy industries like software, noncompetes are unnecessary. We know this because California bans them completely, and our state has the most dynamic and profitable tech industry in the world. Workers here are free to take their ideas across the street to the competition, or strike out on their own as entrepreneurs. It’s the American way.