How the Antitrust Left Got to Pete Buttigieg

Over the winter holidays of 2022, a blizzard blasted much of the western U.S. It blanketed Buffalo in 56 inches of snow, shut down a 200-mile stretch of Interstate 90 — and led to an utter meltdown at Southwest Airlines. The company canceled nearly 17,000 flights, affecting some 2 million would-be passengers, leaving them stranded far from home, missing everything from work to weddings, and forced to choose between shelling out hundreds of dollars for hotel rooms or sleeping on an airport terminal floor using duffel bags as pillows.

This was no one-off. The previous summer, which had seen a surge in flying after Covid kept people mostly homebound since the spring of 2020, had widely been called the “summer of hell.” Airlines had been propped up by $54 billion in federal funding during the pandemic but were struggling to get people where they were going. Passengers’ relief often came in the form of half-refunds and vouchers with an expiration date. They were already looking at who to blame — and many of them were landing on Pete Buttigieg, then almost two years into his job as secretary of Transportation.

By the time the Southwest snafu came around in December, the scrutiny on him was already not kind — but then it went into hyperdrive. The legal director at a prominent economic populist group called Open Markets posted that “The Secretary of Transportation has consumer protection and antitrust powers to stop and remedy the airlines’ misconduct and negligence. Buttigieg appears uninterested in using them.” Soon after, the prolific writer and activist Cory Doctorow posted an essay on what he called “The Learned Helplessness of Pete Buttigieg.” An editor at the tech site The Verge posted that Buttigieg’s handling of the airlines “pretty much nukes his chance of ever being president,” adding, “his opponents would wreck him on this issue alone.” “Air Travel Debacles Put a Star of Biden’s Cabinet in the Hot Seat,” read a New York Times headline in January 2023.

Buttigieg appeared on networks ranging from Fox to PBS to MSNBC, where he called the airline’s handling of the situation “unacceptable,” but still left some critics with the sense that the $17 billion airline was outside the reach of government.

“It sent me into orbit,” Buttigieg, 42, tells me about the Southwest episode today. But he says it also hardened some of the thinking he’d already been doing on this issue. It was during that disastrous travel year, he says, that he dug in on the idea that he needed to use the tools of his office to reshape the aviation sector.

That led to a series of decisions he made as transportation secretary — nudged along by antitrust thinkers in the administration, a longtime friend and advocates calling for remaking the airline industry — that has caused even some of Buttigieg’s loudest critics to reassess him. No longer do they see him as too-cautious, too-centrist, too-poll-tested and too corporation-friendly; instead, some former critics say Buttigieg has become a real ally in the push on the left to check industries that had gotten too big and too powerful.

Bill McGee, a former flight-operations specialist turned advocate on airline issues at an antitrust group, spent that disastrous year lambasting Buttigieg on social media, in press releases and via news coverage. “Buttigieg was allowing them,” McGee tells me of the country’s airlines, “to just day after day, week after week, for months and months, screw over passengers.” But he says something changed. “I didn’t have an about-face on Pete Buttigieg. Pete Buttigieg did an about-face on me.”

Buttigieg took office as Transportation secretary at just 38 years old, inheriting a major bureaucracy — the department has an annual budget of $144 billion and some 57,000 employees — but a political backwater. His predecessors have gone on to corporate board work, lobbying gigs and a policy job at Lyft. But Buttigieg’s national profile — and rumored presidential ambitions — put a spotlight on him from the start. His on-the-job training has played out in public and often painfully; some Republican lawmakers were quick to criticize his slow public response to the toxic train derailment in East Palestine, Ohio, in the winter of 2023, but he arrived day-of to the scene of the collapse of Baltimore’s Francis Scott Key Bridge in March 2024.

But perhaps nothing will mark his tenure more than the crisis that American air travel had become for him, and how he responded to it.

While high-profile economic populists in President Joe Biden’s administration — namely Federal Trade Commission Chair Lina Khan, Department of Justice antitrust division chief Jonathan Kanter and Consumer Financial Protection Bureau Director Rohit Chopra — might get more headlines for their attempts to reshape American industry, Buttigieg might be up to something just as radical. Buttigieg has moved beyond simply punishing bad actors to using the powers of his executive agency to restructure a market it oversees. 

Whether the changes Buttigieg has made will outlast his tenure — or that of a president who called on his Cabinet to fight concentrated corporate power — is a fair question. The regulatory changes he’s instituted “could be a smashing success, or could get caught up in the machinery,” says Diana Moss, director of competition policy at the left-of-center think tank Progressive Policy Institute. One key rule is currently blocked in court, while others won’t take full effect until the next president is in office, with their ultimate success dependent on agency staffers having the resources and willingness to fully execute them. Airlines are still merging, and the economics of commercial aviation is just one slice of his sweeping portfolio.

But Buttigieg has emerged as a surprising ally to, and asset for, the slice of the political left that has embraced an antimonopoly, antitrust framework — a wing of the Democratic Party now fighting to maintain its dominance in a post-Biden Washington, and that once saw Buttigieg as an adversary.

I met Buttigieg in late July for an interview in his office on the 9th-floor of the Department of Transportation’s hulking building on Washington’s waterfront, where he wore a crisp white shirt and cobalt blue tie. Seated steps away from a doormat made from a piece of Portland airport’s iconic teal carpeting, it was the first of two interviews we had (the second by phone in early September) as I sought to understand both how his seeming transformation on airlines came about and how Buttigieg himself saw it. I also spoke with more than a dozen-and-a-half antitrust activists, consumer advocates, Buttigieg advisers, present and former DOT staffers, congressional insiders, White House officials and more.

While some see a deeper shift in thinking at work, in his own telling, his airlines push was nothing more than on-brand Mayor Pete common-sense solution-finding. “Often what I find is, you take a very pragmatic approach,” he said that day in his office, “and that might lead you to a bold place.”

Joe Biden arrived in office with a belief that the American tech industry had grown dangerously arrogant, and stocked his administration with aggressive antitrust thinkers — among them Khan, Kanter, Chopra and Columbia law professor Tim Wu, whom Biden named as his special assistant for technology and competition policy. They embodied a belief that had emerged on the left out of the 2008 financial crisis and was gaining steam among mainstream Democrats: that the country’s political leaders had let Silicon Valley, Wall Street and other dominant industries run riot, to devastating effect. Their positions within Biden’s brain trust were a signal that the new president was serious about doing something about it.

Buttigieg wasn’t one of the antimonopoly thinkers in Biden’s select group, but Wu, at least, saw him as recruitable.

In the administration’s early days, Wu circulated a five-page memo called “The Grand Unified Theory of Antitrust Revival (And a Plan for Action.)” “Goofy memo title,” Wu once called it at a conference. The memo’s contents have not previously been reported on in detail, but according to a copy seen by POLITICO Magazine, it laid out a harsh assessment: Decades of relying on key antitrust enforcers — the FTC and DOJ’s antitrust division — to counterbalance corporate power “has, to be blunt, failed,” in part due to the intransigence of the free-market-enthralled federal courts. Or as one senior administration official deeply involved the situation, speaking without attribution to discuss internal deliberations, puts it, “You don’t fix the whole economy with three enforcers and a special assistant.”

Part of the solution, proposed the Wu memo, was waking up the executive branch’s “sleeping giants,” or competition-enforcement powers of the federal agencies that could — including through rule-making, grants and more — somewhat unilaterally remake the industries they oversaw.

Seven months into Biden’s term, in July 2021, the president issued a sweeping executive order declaring that fighting corporate concentration was the policy of his administration, calling on the whole of government to use its powers to reinvigorate competition. The directive also created a White House Competition Council, setting a schedule for it to meet formally twice a year and naming to it — among the eight of 15 agency heads appointed to the body — Pete Buttigieg. The group convened for the first time in September 2021.

As Wu says he saw it, Buttigieg was the perfect target: smart, ambitious and sitting atop an agency with both what he tells me are “grossly under-utilized” competition powers and, by statute, sole oversight authority of an industry that many in the White House believed to have grown uncompetitive and, as a result, unaccountable.

Bharat Ramamurti, a former economic policy staffer for Sen. Elizabeth Warren who was then the deputy director of the Biden White House economic council, also took note of Buttigieg’s oversight of air travel. “There’s only a small handful of competitors. On a lot of routes, it’s really one airline,” he tells me. “There’s real problems that need to be addressed.”

Airlines had been deregulated by a Democratic president and Congress in the 1970s, after which they gobbled each other up, leaving what’s known as the “Big Four”: Southwest, Delta, American and United. Consolidation, argued the industry, drove down prices and expanded routes. Critics argued that it — coupled with a Washington afraid of the industry’s power — freed the airlines to take advantage of customers. The post-Covid period — with its surge of pent-up travel, staff shortages and shaky service — only heightened that perception. The first year of the pandemic, Buttigieg’s predecessor saw the highest number of passenger complaints lodged in recorded history: more than 102,000.

White House economic-policy staffers weren’t the only ones attempting to cultivate Buttigieg. High-ranking FTC officials met virtually with the new secretary to discuss both consumer protection and the history of U.S. competition law going back to the Clayton Antitrust Act of 1914 — including the considerable powers granted to the Department of Transportation, according to sources involved in the meeting. Consumer advocates also met with Buttigieg to press their case. “We said, ‘Listen, we want you to use this position the way it was intended, which is to be the nation’s preeminent advocate for airline passengers,” says John Breyault, a vice president at the nonprofit advocacy group National Consumers League.

In both conversations among National Economic Council staffers — including then-chair Brian Deese and then-senior policy adviser Hannah Garden-Monheit — and later in formal meetings of the Competition Council, say both Ramamurti and Wu, Buttigieg expressed interest in exploring the more robust application of the department’s competition powers to get there. At one point, says Wu, he was surprised when Buttigieg called him directly to discuss possibilities for using his department’s authorities. (Buttigieg’s staff confirm the call.) But, Wu says, “the first year was kind of dismaying.” Wu declines to specify what exactly he and allies were pressing Buttigieg’s department to do, but at the time, others in the field were advocating for changes like reworking how airlines are permitted to dominate runway slots and airport gates. To be fair, say some, Buttigieg had a ton on his plate, including being deeply involved in the rollout of the $1.2 trillion Bipartisan Infrastructure Law signed by Biden in November 2021. “The infrastructure bill took up a lot of bandwidth,” Ramamurti says. What’s more, Buttigieg had inherited from the Trump administration an intentionally weakened hand when it came to dealing with the industry.

Still, Wu, at least, judged Buttigieg more interested in collaborating with the airlines than confronting them, overly cowed by long-timers in his department and too afraid to stand up to a Congress that — for reasons ranging from the power of the industry’s unions to its own constant flying back and forth from Washington — was deeply invested in the future of flight.

But then came 2022, when everything went to hell.

Headed into that summer, Buttigieg had tried reasoning with the airlines, pressing them for assurances they had the capacity to fly the flights they’d sold and the nimbleness to adapt to challenging conditions. But the cancellations mounted. On Father’s Day weekend, Buttigieg’s own flight was scrubbed — seen by some in the industry as a slap in the face, given how airlines track the travel of VIPs. (“It made the news,” says Buttigieg, “but it’s not like it only happened once.”) Buttigieg was getting pummeled in public and among members of his own party. In a letter to Buttigieg, Rep. Ro Khanna criticized his department’s response as lacking “urgency, imagination and boldness,” adding, “The time to rein in the excesses of the airline industry and protect American travelers is now.”

Around Labor Day, Buttigieg made a move. Buttigieg had his team build easy-to-read online dashboards tracking the airlines’ compliance with a certain set of DOT-picked criteria, from the handling of meal costs during flight delays to considerations given to military members. He then posted them to a federal website, FlightRights.gov. Consumer advocates loved it. Ramamurti says he found it “clever.” For the first time, customers could easily see airlines ranked on their customer service by the government itself. The airlines, for their part, generally hated it. Airlines for America, the big carriers’ main lobbying group, complained that unless it complied 100 percent with DOT’s metrics, “the carrier receives a red ‘X,’ which is misleading.” Buttigieg — one of the few members of Biden’s Cabinet known to most of the general public — was using his bully pulpit.

When Southwest cratered in the winter, the dashboards usefully provided public commitments to which the airline could be held. But the episode made him frustrated, too, says Buttigieg. Sure, he says, he was happy to be invited on TV to give guidance to affected customers, but “When you’re doing a half-dozen interviews about what’s going on with a private company, at a certain point you ask yourself, ‘Why isn’t this company on television twice as much as I am?’”

As Buttigieg tells it, he’d been meeting with staff in the fall of 2022 when one avenue of recourse became immediately clear to him. “If you’re an airline, you can get away with sitting on a hundred million bucks for a year, and the worst thing that happens to you is a million-dollar fine,” he remembers thinking. “Interest rates being what they are, you would actually be up on that deal.”

Fines, historically, had been in the single-digit millions. “What if we add a zero?” he remembers asking staffers, which was confirmed by a senior DOT official. Airlines might refuse to settle and insist on going to court (where penalties could ultimately be higher or non-existent). “And I thought, ‘Let ’em sue.” He’d put the thinking to work when it came to Southwest. Eventually, in December 2023, the carrier would agree to pay a $140 million penalty for its handling of the 2022 winter season — the largest in DOT’s history by a factor of 30.

But policing went only so far: The department had a grand total of about 30 enforcement staffers and a method of hand-tracking complaints on spreadsheets. Moreover, there was little sign that even robust enforcement of penalties would change airlines’ behavior. The department, he came away thinking, would be stuck doing what he later called in a speech “chasing symptoms.”

It was around then that Buttigieg began filling out his circle with thinkers who would supply him with fresh ideas and tactics.

Buttigieg created the post of chief competition officer, a first for DOT, and at the start of 2023 installed in it Jen Howard, something of a Johnny Appleseed of the modern antitrust movement, having spread the gospel of creative government intervention in markets across the federal government, most recently at the FTC as Khan’s chief of staff.

Buttigieg also began drawing on the thinking of Ganesh Sitaraman, a friend from their Harvard days (and groomsman in Buttigieg’s 2018 wedding) who is now a law professor at Vanderbilt and prominent competition-policy thinker. Sitaraman’s 2023 book Why Flying is Miserable — And How to Fix It is a popularization of the study of what’s known as “networks, platforms and utilities,” or NPUs, as in so-called infrastructural industries characterized by high barriers to entry and tendencies towardf consolidation. Because they are also often central to commercial and social life, he argues, these industries need to be regulated.

In late January, Sitaraman was with McGee, brought in to brief Buttigieg and DOT staff on a white paper they co-authored called “How to Fix Flying,” laying out a detailed plan from cracking down on airlines’ attempts to veto airport investments that might attract competitors to mandating minimum seat sizes.

Sitaraman declines to comment on the details of his discussions with Buttigieg. But Buttigieg says he’s taken from Sitaraman’s work a more unified theory to build out his then-growing belief that some industries like aviation can’t simply be left alone to sort themselves out. Such industries are “not your textbook, natural competitive marketplace for peanut butter,” he tells me. “These are economic scenarios where power comes into play. History matters a lot. And government matters a lot.”

With this grander vision in mind, Buttigieg started tackling a seemingly small problem that he thought would be key to the whole market. The department had announced at the tail end of the “summer of hell” that it was interested in writing new rules governing airline refunds. Buttigieg began thinking more deeply about their mechanics, telling me he suspected that the airlines were engaged in what’s known in the field as unrealistic scheduling — that is, selling seats on flights they knew reasonably well might not take off on time, if at all.

As Buttigieg saw it, he tells me, for the airlines there was little downside to making the gamble. If they canceled the flight and rescheduled passengers much later — at a point that would require them to make other travel arrangements, perhaps on another airline — the original airline still had the customers’ money. Even if some of the customers asked for a refund, the practice of many airlines was to issue a voucher for only that same airline.

Refunds, as he saw it, needed to be really and truly automatic (and not just for tickets, but for baggage fees on waylaid luggage and Wi-Fi fees for in-flight connections that didn’t work right) — issued quickly and in the original method of payment. That framework would have the consequential effect of easing the burden on his enforcement staff. More important, the reassurance of an automatic refund would free customers mistreated by one airline to take their business to its competitor.

“If an airline knows that everybody on the plane is going to get their money back,” Buttigieg tells me, “that changes the whole economics of even considering a schedule you can’t really support.”

Buttigieg set out to craft a binding, enforceable rule mandating automatic refunds in the original method of payment for significantly delayed flights (more than three hours domestically) within a short time period (seven days for credit cards). That rule became official federal policy in late April of this year.

At the same time, he picked another battle. Airlines today make much of their money off so-called ancillary fees, from $25 to pick an exact seat to a few hundred dollars for supervision of unaccompanied minors. The airlines, which promote them as a way of letting travelers customize their flight experience, made some $118 billion in such fees last year, according to one industry estimate. But Buttigieg says he sees them as a means of hiding the true cost of a flight, making it unwieldy to compare prices. On the same day the refund rule was announced, Buttigieg instituted a second rule: Airlines would have to make those fees transparent up front. The move, the thinking went, would subject airlines to the kind of comparison shopping that consumers in any other market do. 

With the new ancillary fee rules, the airlines and its main lobbying group in Washington accused Buttigieg of overstepping his authorities, and this time they sued. They argued in court filings that, among other flaws, the new mandate “doesn’t just prohibit — it prescribes.” In late July of this year, a judge in the conservative-leaning 5th Circuit Court of Appeals agreed — concluding that Congress had not explicitly granted the agency the power to dictate terms over airline fees the way it has in other matters, such as in the prescription of air-traffic rules — and stayed the rule. It is on hold pending a hearing before a judicial panel.

The courts will have their say, and the Supreme Court’s negation this summer of the so-called Chevron deference that had for decades largely left federal agencies alone to craft rules enforcing their legal authorities as long as they appeared reasonable arguably dealt Buttigieg a blow. “If I was in the airlines’ position now,” National Consumers League’s John Breyault told me shortly after that ruling, “I’d be feeling a little more confident than I was before.”

 

Buttigieg, say those who have worked with him, has a penchant for both policymaking and political pageantry. And lately, he’s used both to address what critics on the economic populist left saw as a key weakness: talking a good game but falling short on execution.

In February of last year, Sen. Elizabeth Warren, with whom Buttigieg tangled when both ran for the 2020 Democratic presidential nomination, chided Buttigieg in a speech, saying “Secretary Buttigieg has the power to stop anti-competitive airline mergers, and he should use that power right now.”

Surprising many, the next month, in March 2023, Buttigieg did use that power. He came out in opposition to a merger between JetBlue and Spirit, concluding that it would result in doing away with a low-cost option appealing to cost-constrained flyers. It was a break from tradition: U.S. Transportation secretaries have historically not stood in the way of such deals. JetBlue’s then-CEO called it “unprecedented.” Soon after, in May, Buttigieg popped up as the unlikely keynote speaker at an “anti-monopoly” summit put on by the advocate Bill McGee’s group, the American Economic Liberties Project — a somewhat pugilistic group known for targeting politicians who oppose its agenda but celebrating those who might come into alignment (especially when it puts them into conflict with powerful industries). “To those who view this as a change in approach,” Buttigieg told the assembled crowd, “I know it is.”

Recently, too, Buttigieg has begun using his relative celebrity — a fixture on cable news, he also, between his official and personal accounts, enjoys some 4.4 million followers on X (or 1.8 million more than Secretary of State Antony Blinken) — as a policy weapon.

As the department was finalizing its refund rule this spring, Congress took up a bill reauthorizing funding for the Federal Aviation Administration, a branch of the DOT. The bill was must-pass, given the FAA’s role overseeing flight safety. But as written, the measure would have cut the legs out from under Buttigieg’s automatic refund plan — in one iteration, requiring passengers to proactively request compensation. (The airlines, for their part, argued they were already handing out tens of billions of dollars in refunds each year without federal intervention.)

Buttigieg went to battle, promoting automatic refunds at a press conference at the Washington-area Reagan National Airport where he was introduced by McGee, creating a social-media-ready video defending his approach. At DOT’s request, the White House jumped into the fight, according to a source with direct knowledge of the situation, speaking without attribution to discuss its inner workings. Buttigieg worked closely with Biden’s chief of staff Jeff Zients and counselor Steve Ricchetti to leverage the president’s weight in the fight. Biden created his own video. (Buttigieg’s video got four times as many views as his boss’.)

“I eat my hat on Buttigieg, who I thought of as a McKinsey operator,” posted Zephyr Teachout, a Fordham law professor and high-profile antitrust thinker, during the debate, referencing his time spent as a corporate consultant. “He’s doing really great work.”

(The profile-raising might have worked too well: The gossip site TMZ posted a video at the time of a woman at Los Angeles International Airport who had been rebooked on a Delta flight leaving the next day, yelling at gate agents to get Buttigieg on the phone, calling him a “useless motherfucker.”)

As the issue got attention, Buttigieg tussled on social media with Sen. Ted Cruz after the Texas Republican and Commerce Committee ranking member went on CNBC calling automatic refunds “frankly a dumb idea.” Buttigieg pushed back: “Ending the refund runaround isn’t a ‘dumb idea.’ It’s common sense.” Warren (who later told the Boston Globe she’d been “over the moon” about the Buttigieg-backed rule) and Missouri Republican Sen. Josh Hawley jumped in to change the bill to enshrine automatic refunds, teaming up with Massachusetts Democratic Rep. Ed Markey, and the measure passed.

“We took on the airline lobby together,” Warren says by email about Buttigieg, adding, “that was a huge win for anyone who flies.” “Together, we brought the efforts in for the landing,” Markey says, also by email. (Hawley’s office declined to comment.) 

Biden signed the FAA bill in mid-May, and its provisions on automatic refunds immediately went into effect, putting the force of law behind many of the rules already adopted by the agency — and making it much more difficult for them to be challenged legally or overturned by future administrations. (Some additional provisions in DOT’s rules not addressed by the bill, such as baggage-fee refunds, went into effect this month. Others, particularly those that apply to the handling of travelers whose plans change due to serious communicable diseases, will go into effect in April of next year.)

How radical should we see Buttigieg’s approach as? “It would have been unthinkable as recently as five years ago, certainly ten years ago,” says American Economic Liberties Project’s Bill McGee. “It has been shocking in a very positive way.”

 
Buttigieg’s political future is uncertain, but his name is being floated for all sorts of future perches, from governor of his adopted home state of Michigan to U.S. ambassador to the United Nations in a Kamala Harris administration. And his aggressive moves on aviation arguably help clear up a political problem for him, as continued air-travel woes would likely be a drag on his career prospects.

But the political boost is far from a sure thing. While the airline industry has for decades refrained from criticizing its regulator, it’s beginning to accuse Buttigieg of going too far — in a September Wall Street Journal op-ed, longtime Continental CEO Frank Lorenzo accused Biden and Buttigieg of “European Union-style” regulatory overreach — and paint him as a grandstanding politician picking on the industry to raise his profile. Asked for a read on Buttigieg’s tenure, Airlines for America, the industry’s main lobbying group, sent a statement: “Secretary Buttigieg is a gifted communicator who has elevated the Department of Transportation’s platform in the public eye.”

There are also those who think he hasn’t gone far enough. The Progressive Policy Institute’s Diana Moss argues that Buttigieg’s department has considerable statutory authority to force fair competition in the airline industry and, she says, “they haven’t plowed the depths of it”— such as requiring major airlines to share their underused gates with smaller competitors or demanding tougher concessions as part of its recent approval of a merger between Alaska Airlines and Hawaiian Airlines. (In late October, Buttigieg and assistant attorney general for antitrust Jonathan Kanter announced their departments had launched a joint inquiry into the state of competition in air travel, looking into everything from gate access to airline rewards programs.)

Meanwhile, the Harris camp is still working out its own economic policies; she has, at least, kept an arm’s length from the populism pitched by her current boss.

That makes Buttigieg, embracing the cause of using the might of government to fight concentrations of corporate power after trying other options, a particularly valuable ally to those fighting for Democrats to continue on the path set by Biden. In an email, FTC Chair Lina Khan calls Buttigieg a “terrific partner in promoting fair, honest, and competitive markets.”

Buttigieg has won over some long-standing critics, too. When, in July, Buttigieg posted on X that Delta would be held responsible for stranding passengers as the result of an industrywide software crisis, Warren, his old nemesis, huzzahed: “@SecretaryPete, go get ’em.” Via email, she goes on: “For decades, the Department of Transportation failed to hold airlines accountable, but that’s starting to change under Secretary Buttigieg. Secretary Buttigieg has buckled down and demonstrated that when you actually stand up to these big airlines, you can make a real difference.”

Wu, for his part, has come around, saying that when it comes to competition, the Department of Transportation under Buttigieg is “an under-acknowledged success story,” even if, he says, “it took two years to get there.”

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