Biden's antitrust adviser warns of 'profusion of junk fees' in US economy

Biden’s antitrust adviser warns of ‘profusion of junk fees’ in US economy

Joe Biden’s antitrust adviser has warned of a ‘profusion of junk fees’ in the US economy, as he pushes to expand the war on hidden costs to include those affecting investors in the securities market .

In an interview with the Financial Times, Tim Wu, the Biden administration’s competition policy adviser, said there was a “sense that there has been a profusion of junk fees in the economy, things that confuse people, coercive fees, deceptive practices”.

He added that it was a “perfect sector for a whole government. . . approach” to surprise fees that inflate prices unexpectedly.

Wu’s comments come as the White House has begun working with the Securities and Exchange Commission to incorporate securities market junk fees into the “broader mandate” of the competition council, which was launched by Biden. to help reduce market concentration.

Formed by the heads of several federal agencies, including the SEC, the board is tasked with implementing the executive order signed by the president last year to limit corporate power in the US economy, from transportation to technology and the bank.

Wu, an architect of order, is part of a new generation of progressive antitrust officials — including Jonathan Kanter, head of the Justice Department’s antitrust division, and Lina Khan, chairwoman of the Federal Trade Commission — appointed by Biden to combat anti-competitive behavior in corporate America.

Among the competition council’s tasks is understanding how junk fees manifest themselves in different industries and reducing those hidden costs, an initiative championed by Biden in a speech days before the mid-elections. mandate.

After introducing new guidelines from the Consumer Financial Protection Bureau, which focused on unfair pricing, to reduce illegal “surprise” bank charges, Biden warned, “We are just getting started. There are tens of billions of other junk fees in the economy, and I’ve asked my administration to reduce or eliminate them.

An SEC official said the agency had presented several initiatives to the Competition Council, adding that the regulator was more focused on expanding fee disclosure than imposing outright bans.

Measures include SEC proposals unveiled in February to increase disclosure about fees charged by private funds to investors, and rule amendments passed in October requiring funds to clarify shareholder reports and present transparent and balanced disclosures. in publicity material, the official said.

The SEC was working with brokers and advisers to be more cost-conscious in their recommendations to retail investors, the official said, such as considering account fees and transaction costs when making recommendations to clients. .

Wu said securities regulation offered “low-hanging fruit” to improve prices, a sign that the White House is expanding its fight against unwanted fees from consumer-facing businesses, such as airlines and banks.

But he added that there are “other opportunities” to challenge hidden costs in the securities market beyond the SEC’s existing initiatives. He said the White House is in the “early stage” of assessing what constitutes undesirable fees and potential securities remedies.

Wu pointed to health care and shipping as other areas where prices should be reviewed. “The main problem in healthcare is that there aren’t really a lot of prices. . .[but rather issues]like surprise billing where people suddenly have a bill for $15,000 that they weren’t expecting. In the shipping industry, regulators have proposed rules requiring carriers and marine terminal operators to clarify billing practices.

“The general idea is to try to clean up pricing in the United States,” Wu said. “

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