Contents

Introduction. 1

Anticompetitive Regulations 2

Recommendations 6

Conclusion. 7

Endnotes 7

Introduction

On March 27, 2025, the Department of Justice (DOJ) launched its Anticompetitive Regulations Task Force (Task Force) and invited public comment to identify “state and federal laws and regulations that undermine free market competition and harm consumers, workers, and businesses.”[1] The Task Force follows an executive order issued by President Trump titled “Unleashing Prosperity Through Deregulation” that called for the elimination of “unnecessary regulatory burdens.”[2] In a subsequent executive order associated with the Trump administration’s Department of Government Efficiency (DOGE) deregulatory initiative, federal agencies were exhorted to identify and examine “unlawful regulations and regulations that undermine the national interest,” including those that “impose undue burdens on small business and impede private enterprise and entrepreneurship.”[3] 

The Information Technology and Innovation Foundation (ITIF), the world’s top-ranked science and technology policy think tank, commends the DOJ for its efforts to identify anticompetitive regulations and greatly appreciates the opportunity to respond to its request for public comment.

ITIF’s comments proceed in three parts. First, ITIF provides a number of examples showing that while targeted rules and regulations which address real market failures and improve the status quo can be defensible, there are many that do not benefit competition or consumers and should likely be rescinded. As discussed below, many of these rules and regulations take the form of ill-advised attempts to dictate how firms may price their services and which result in market inefficiencies and consumer harm. Other rules and regulations are designed to prevent procompetitive disintermediation that would benefit consumers with lower cost products. Indeed, a number of these rules and regulations have the effect of stifling dynamic competition from digital firms that challenges established incumbents by providing consumers with innovative new products and services. The comment next provides a brief summary of high-level recommendations for the DOJ as it evaluates the competitive merits of a regulation. A short conclusion follows.

Anticompetitive Regulations

Federal

The Federal Aviation Administration’s (FAA) Weight-Based Fee Pricing Guidelines

Airport landing fees that are set strictly as a function of aircraft weight are a textbook example of a well‑intentioned cost‑recovery rule that has morphed into a competitive distortion. Because the fee a carrier pays is virtually the same at 7a.m. as at 2p.m., and because a 50‑seat regional jet is charged far less than a 150‑seat narrow‑body, incumbents can protect their market share by blanketing the most valuable peak hours with numerous lightly loaded flights. The result is chronic runway congestion, more delays, costs that are passed through to passengers, and an artificial scarcity of peak‑hour capacity that locks out potential entrants that might prefer to operate fewer, fuller planes. In short, weight‑based pricing allow dominant carriers to capture scarcity rents while consumers and new competitors absorb the inefficiencies.^[4] Unfortunately, this outcome is not a quirk of airline strategy—it is baked into federal policy. Specifically, the FAA’s guidelines for airport charges have long been interpreted to mean weight‑proportional fees.^[5]

The FAA’s federal weight pricing guidelines, therefore, operate as a de facto anticompetitive regulation: they predetermine price structure, skew competitive entry decisions, and prevent local operators from using market signals to allocate scarce runway capacity efficiently. Indeed, it has long been estimated that shifting to marginal‑cost or congestion‑based pricing could generate on the order of $6billion in annual net benefits, largely through reduced delay and more efficient use of existing infrastructure.^[6] Eliminating the weight‑based fee requirement and replacing it with congestion pricing is thus well worth examining. Empowering airports to experiment with alternate pricing models, such as time‑variant charges, slot auctions, or other market-based mechanisms would better allow price signals to convey the true cost of each movement, encourage airlines to up‑gauge aircraft and smooth schedules, and open peak‑hour access to lower‑cost competitors.

Optometrists Efforts to Weaken the Contact Lens Rule

In addition to federal regulations that can harm competition, it is also important to be vigilant about efforts to undo successful legislative efforts in ways that could harm consumers. For example, in 2002 Congress passed the Fairness to Contact Lens Consumers Act (FCLCA), which made it easier for contact lens users to purchase their contact lenses from any seller, provided they have a prescription. This framework has been implemented by the Federal Trade Commission’s (FTC) Contact Lens Rule, which put forward strong protections to make sure that consumers know they have a right to purchase their lenses from any licensed seller. However, as ITIF has explained:

No surprise, optometrists are lobbying to weaken the FTC rule, particularly by making it harder and more expensive for third-party lens sellers to get approval for selling lenses. Congress should respect the FTC’s decision and not be seduced by these rent seekers’ arguments. Especially in a time of high inflation, consumers’ interests should come first.[7]

The FTC’s contact lens rule is a great example of both sensible consumer protection regulation that can improve the status quo, as well as the continuous threat of special interests seeking to engage in capture that harms the public interest.

State and Local

Three-Tier System in Liquor Distribution

State “three-tier” mandates for alcohol distribution require every bottle to pass from producer to wholesaler to retailer, and most states prohibit businesses from holding licenses in more than one tier. The U.S. Department of the Treasury’s 2022 competition review found that these rules—originally meant to curb vertical monopolies—now block many small brewers, vintners, and distillers from obtaining wholesale representation and “substantially limited” direct-to-consumer (DTC) channels that could bypass the bottleneck.^[8] The report noted that as distributor consolidation deepens, small suppliers faced “challenges in getting their products attention from the major distributors,” while consumers, new entrants, and public commenters singled out the three-tier system itself as the “biggest barrier to entry.”^[9]

Opening the market to online, direct shipment is the clearest remedy. Indeed, the FTC’s prior study of interstate wine sales showed that outright bans on direct to consumer shipping deprived consumers of up to 21 percent savings on many popular wines and denied access to thousands of labels unavailable locally; by contrast, states that allow interstate shipping report “few or no problems” with under-age deliveries when adult-signature safeguards are used.^[10] Competition agencies should therefore urge states to permit reasonable volumes of producer-to-consumer and producer-to-retailer sales. Removing the compulsory wholesaler layer would likely expand shelf variety, lower prices, and let digital platforms serve consumers in the alcohol market just as they do for other goods—delivering immediate consumer-welfare gains without compromising legitimate public-health oversight.

State Car Dealer Limits on Buying Direct From Car Manufacturers

State dealer-franchise laws prohibit or severely restrict manufacturers from selling new vehicles directly to consumers in most of the country. A DOJ economic‐analysis paper catalogued statutes in 45 states that bar direct sales, noting they arose long after the assembly line and now “require[e] that new cars be sold only by dealers.”^[11] The FTC has likewise warned state legislatures that such bans “operate as a special protection for independent motor vehicle dealers…likely harming both competition and consumers” because they foreclose alternative, more efficient distribution models.^[12] Even today, litigation continues—Tesla’s 2024 antitrust suit against Louisiana’s direct-sales ban was recently revived on appeal—underscoring how these rules still block new entrants and stifle rivalry in electric-vehicle markets.^[13]

The consumer cost is substantial. DOJ’s analysis estimates that the conventional dealership channel can add up to 30 percent of a vehicle’s final price.^[14] In addition to lowering costs, direct sales would also let manufacturers roll software updates, servicing, and price transparency into the transaction, capabilities critical for EV startups, as Professor Daniel Crane explains, yet franchise prohibitions force buyers to haggle at brick-and-mortar lots or cross state lines for the same car.^[15] The result is higher prices, less choice, and slower adoption of advanced technologies. For those reasons, competition agencies should urge states to repeal, or Congress to preempt, dealer-only mandates and allow manufacturers to sell and deliver vehicles directly online, while leaving dealers free to compete on service and price. Giving consumers the option to click “buy” on a factory website would increase competition, spur distribution innovation, and align auto retailing with the e-commerce convenience Americans already enjoy for nearly every other durable good.

Ground Transportation Policies at Airports

Everyday thousands of Americans rely on ground transportation at airports. While traditionally their needs have been serviced by taxi companies, over the past decade ride-sharing services like Uber and Lyft have grown in popularity and regularly service airport customers. Unfortunately, and consistent with the historically close relationship between taxi companies and airports, in many locations these ride sharing services are put at a disadvantage to protect the taxi incumbents—a phenomenon indicative of the “capture” that not infrequently plagues regulation. Specifically, many airports charge higher ground transportation fees on ride-sharing services than taxis, as well as provide the latter access to more favorable pickup locations.[16] Such conditions constitute unnecessary barriers to expansion for dynamic ride-sharing services.

Importantly, these policies don’t just harm ride-sharing competitors, they also harm consumers. Absent these rules and regulations, consumers would benefit from greater competition in the form of lower prices and increased convenience for using ride sharing services. Indeed, workers—and specifically, drivers for ride-sharing services—may also be harmed through lost business stemming from the higher fees and greater inconvenience. While airport logistics are of course complex, one solution is, at least at one level, simple: ensure that FAA Guidelines that prevent discrimination by airports in other areas, like aeronautical fees, apply to the terms upon which airports deal with ground transportation services. Doing so would create a level playing field that enables ride-sharing services and taxis to compete on the merits at airports in a way that ultimately benefits consumers with lower prices and better service.

State Licensure Laws and Barriers to Telehealth

Outdated state licensure laws are a major regulatory barrier to the growth of virtual care. Under current rules, health-care providers are generally prohibited from treating patients across state lines unless they are separately licensed in each state.[17] This fragmented, state-by-state licensing system creates artificial barriers that complicate access to care—particularly for patients in rural and underserved areas—and imposes unnecessary burdens on health care providers who are otherwise fully qualified to practice.

These regulations often make little sense given that telehealth can safely and efficiently deliver high-quality care across geographic boundaries.[18] In some cases, state lines split metropolitan areas, disrupting continuity of care. The burdens on providers are significant: while core clinical standards are already nationally uniform (e.g., the U.S. Medical Licensing Examination, postgraduate training), states impose duplicative and inconsistent requirements such as additional background checks, fingerprinting, character references, or documentation of continuing medical education. The costs are also steep, with some state licenses exceeding $1,000 plus additional administrative fees.[19]

Efforts to improve licensure portability—such as interstate compacts—have not kept pace with the growing demand for telehealth.[20] These outdated and duplicative regulations reduce competition, raise costs for patients, and limit consumer choice. A modernized, nationally consistent approach to licensing would expand access to care, reduce administrative overhead for clinicians, and foster greater innovation in the delivery of health services.

Realtors’ Power Over Multiple Listing Services

ITIF has long raised concerns about a lack of competition in the real estate industry. In a 2017 report, ITIF explained how both individual brokerage firms as well as the Multiple Listing Services (MLSs), the regional organizations that maintain exclusive access to property listings on behalf of real estate agents, restrict access to data about property listings.[21] As ITIF made clear in a prior comment to the FTC and DOJ, anticompetitive behavior in this space includes “prevent[ing] certain third-parties from using current and historic listing data by creating strict data-use policies, denying access to non-brokers, or by keeping the data fragmented and unstandardized.”[22]

Despite DOJ’s recent settlement with the National Association of Realtors (NAR), significant barriers to competition remain. The core issue is that real estate agents must maintain NAR membership—along with local and state association memberships—to access Multiple Listing Services (MLS) data.[23]

Moreover, agents continue to engage in steering practices, directing clients away from listings offering lower compensation rates or properties sold independently without an agent. This behavior undermines the settlement's intent to increase competition and consumer choice by effectively penalizing sellers who opt for alternative fee structures or direct sales approaches.[24]

In the face of these industry dynamics, state laws prohibiting brokers from offering rebates to consumers are especially harmful in preventing consumers from enjoying lower prices. While courts have deemed these laws immune from the antitrust laws as state action, there is thus all the more reason for federal authorities to work collaboratively with the states that still have such laws and explain why these and other restrictions in the real estate space should be curtailed.[25]

Price Caps For Food Delivery Apps

As our country struggled to cope with the devastating COVID-19 pandemic, a number of regulations were passed throughout the economy to help Americans manage the exceptionally difficult circumstances. These included price caps for the fees that food delivery apps, like DoorDash and Uber Eats, charge merchants for their delivery services. These fees usually take the form of a percentage commission of the customer’s food order and vary depending on both the merchant and the services they are receiving. For example, merchants that take advantage of marketing and other tools may pay higher commissions, whereas some large merchants with high volume may be able to obtain discounts that drive a lower commission.

To be sure, restrictions on merchant fees may have had some justification in a world of lockdowns: consumers were not able to easily access restaurants and were forced to rely heavily on food delivery services to eat out. However, with the end of the COVID-19 pandemic, and although many cities and localities have moved away from or reduced these restrictions and returned to more market-driven price competition, some, such as Washington D.C., appear to have maintained the food delivery price caps. As studies have found, maintaining these price ceilings risks reducing the overall amount of food deliveries in a way that harms not just the consumers who would be willing to pay more for certain services (such as, for example, delivery to a more remote location that becomes cost prohibitive) but the eateries that want to serve them, many of whom are small business.[26] What’s more, prolonged price caps pose a long run risk of chilling innovation by limiting the ability for food delivery apps to recoup the investments they make in their platforms to provide merchants and users with new and innovative services.

“Price Gouging” Rules in New York

Unfortunately, not all attempts to regulate pricing are remnants of the COVID-19 pandemic. For example, some states like New York are presently considering broad rules to enforce existing statutes that prevent “price gouging,” or a situation where in “an abnormal disruption of the market for an essential product, triggered by an enumerated list of causes…a seller charges an unconscionably excessive price for that product.”[27] To be sure, while these types of statutes have a long history in many industries, such as caps on interest rates, rules that seek to broadly impose price-gouging prohibitions not only do not promote competition by proscribing exclusionary or collusive behavior, but are likely to result in considerable legal uncertainty in determining what actually constitutes “price-gouging,” as well as harm consumers both in the form of static inefficiency and diminished innovation.

Consider ride-sharing services, an example given in the report of where price-gouging rules could be applied: “The ride-hailing service that raises driver pay for a given ride by $X and then raises the price of that ride by $X has not engaged in price gouging even if $X is a substantial sum. It is only if the increase of price increased the ride-hailing company’s profit margins for that ride that the ride-hailing company has violated the price gouging statute.”[28] But rules based on the conclusion that “10% or greater price changes occur overwhelmingly during times of abnormal market disruption and not in the ordinary course of business” are likely to result a substantial amount of false positives.[29] Specifically, a 10% threshold is likely to encompass price increases that do not reflect any “triggering event” specified in New York’s price gouging law, but instances of dynamic pricing in response to increased demand and/or reduced supply driven by conditions like a moderate but sudden weather event, or an accident that causes increased traffic. By applying such a low bar, New York’s price gouging rules would thus have the effect of inefficiently reducing supply, lowering compensation for drivers, and limiting choices for consumers who would be willing to pay higher rates, as well as consumers living in areas that lack robust public transportation.

Recommendations

As it continues to assess the competitive merits of various rules and regulations, ITIF offers the following general recommendations to the DOJ:

▪ Regulation should address demonstrable market failures. Regulations designed to improve economic outcomes are typically only justified as a corrective to a real and persistent market failure. This is often evinced by a highly concentrated industry that consistently demonstrates high prices, lack of dynamism, reduced output, or poor product quality. In general, regulations designed to improve economic welfare in industries that do not exhibit market failure should be reassessed so as to determine whether or not they are actually necessary.

▪ Regulation should be a tool of last resort. Even in the case of real market failure, law enforcement regimes, including antitrust and consumer protection, often provide a much more expedient and cost-effective way to correct market failures relative to regulation. When analyzing a regulation, policymakers should therefore consider whether the underlying policy goals can be achieved through already existing and more light-touch law enforcement tools.

▪ Regulation should improve the status quo. In the case of a failing market that cannot be remedied through the judicious use of law enforcement tools like antitrust and consumer protection, regulation still may not be justified if there is reason to believe that it will harm—rather than help—the status quo. In reality, regulators often have insufficient incentives or abilities to improve economic outcomes, leading to situations where regulation results in capture and/or inefficiencies as well as other costs that harm consumers and competition.

Conclusion

ITIF broadly supports the efforts of the DOJ to improve competition and consumer welfare in the American economy by identifying and working to eliminate anticompetitive regulations at both the federal and state levels. However well-intentioned they may be, many rules and regulations are often both unnecessary and stifle the innovation and dynamism that is key to driving economic growth. With the resolution of landmark antitrust cases against America’s leading technology firms pending and an increasingly dire techno-economic rivalry with China in areas like artificial intelligence, ITIF hopes that this program of minimizing government intervention into the economy and promoting innovation is consistent with the DOJ’s broader antitrust and competition policy enforcement goals.

Thank you for your consideration.

Endnotes