Skip to main content

This new U.S. antitrust bill could be the end of Big Tech mergers as we know it

Sen, Amy Klobuchar
Sen, Amy Klobuchar (Image credit: Senate.gov)

Senator Amy Klobuchar (D-Minnesota), the incoming head of the Senate antitrust subcommittee, has introduced a bill that would bring wide reforms to competition laws and antitrust enforcement that puts companies that sell the tech we love directly in its anti-competitive crosshairs.

The proposed Competition and Antitrust Law Enforcement Reform Act outlines the new administration's policies and attitude towards anti-competitive behavior in several key areas. One is the idea of projecting more of the investigation costs to the companies defending their practices; the other is a set of consumer protections like requiring companies that are given permission to merge or buy another one to show how they have kept their relevant industries competitive since initial the hearings.

It's important not to get attached to any of the proposed changes just yet though, as this is a bill that needs to be passed by Congress. Though with increased scrutiny by both parties towards recent moves from companies like Facebook and Google, there should be plenty of bipartisan support. Klobuchar is confident her bill will have the votes, and explains why we need these changes to the Wall Street Journal:

"We have an increasing monopoly problem, really headlined by what is happening with tech but also extending across the economy, Our laws have to be as sophisticated as those that are messing around with competition."

Congress

Source: Louis Velazquez (Image credit: Source: Louis Velazquez)

Still, Big Tech warns against any sort of sweeping reforms. Trade associations and lobby groups say that restricting bigger companies will ultimately penalize smaller ones and there will be plenty of pushback against any changes from companies whose products and services we use every day.

Should there be enough support for the Competition and Antitrust Law Enforcement Reform Act to pass, there are some important key points that would strengthen antitrust investigation and enforcement. A synopsis from CNBC:

  • Raising the bar for dominant firms seeking to merge with other companies, including by shifting the burden of proof onto merging parties.
  • Adding a prohibition on "exclusionary conduct" to the Clayton Act, which governs mergers, to make it harder for dominant firms to prove their mergers won't harm competition if they engage in such acts. Exclusionary conduct would include acts that disadvantage current or potential competitors or limit rivals' ability or incentive to compete.
  • Authorizing $300 million increases to the annual budgets of the Department of Justice's Antitrust Division and the Federal Trade Commission, which enforce antitrust laws.
  • Allowing antitrust enforcers to seek civil penalties for violations of monopoly law and the exclusionary conduct offense created by the bill, on top of other remedies they can already call for, like breakups and injunctions.
  • Creating an independent Office of the Competition Advocate within the FTC that can conduct market analyses to inform enforcement and help elevate consumer complaints.
  • Requiring merged companies to update agencies on the outcomes of their deals and for the agencies to study the impacts of past mergers.
  • Extending whistleblower incentives to those flagging potential civil violations.

Mark Zuckerberg

Source: Android Central (Image credit: Source: Android Central)

The last two bullet points here are exceptionally interesting and something big business and special interest lobby groups will fight against, tooth and nail. Imagine if Facebook were forced to offer an annual report about its acquisitions of WhatsApp and Instagram instead of finally being forced to answer tough questions by the U.S. House in 2020? Or if a Facebook employee would be protected against backlash if he or she decided to report the problems they were seeing. It's a safe bet to say similar skeletons are in every big tech company's closet so this sounds like bad news to the big players.

A government is in place to protect and serve people, not corporations. We need a watchdog with real teeth.

But governments aren't in place to protect the big players. They are placed to protect all of us, especially against adversaries with seemingly limitless resources at their disposal. The Competition and Antitrust Law Enforcement Reform Act probably won't pass as written, but we can hope it keeps enough of its teeth to be an effective counter to some very bad decisions from the FTC in the past.

Big Tech doesn't have to be our enemy, and not so long ago it wasn't. We'll probably never go back to those days so we require an effective watchdog who has our best interests in mind.

Jerry Hildenbrand
Jerry Hildenbrand

Jerry is an amateur woodworker and struggling shade tree mechanic. There's nothing he can't take apart, but many things he can't reassemble. You'll find him writing and speaking his loud opinion on Android Central and occasionally on Twitter.

8 Comments
  • The comments section of a tech blog is hardly the place to discuss all the implications of a bill such as this. I am a lifelong Democrat but this bill goes too far. Encouraging competition is great but aggressively punishing successful companies for being successful should be undertaken with great caution. We need crap tons of such companies throughout the economy.
  • The kind of thinking you are describing made sense for simple industries that it was possible for competitors to jump in to. Tech acts differently. Network affects naturally seem to drive markets to a very small number of dominant players with almost insurmountable positions. Even when an industry is disrupted successfully the new leaders are usually other large companies with monopolies in adjacent markets. Unless something changes the big tech companies we have now are the ones that will stay dominant, maybe occasionally cannibalizing each other. Given this reality regulation seems prudent. I'd argue frankly that they might need to be viewed similarly to other natural monopolies and treated as utilities, but I think that's probably a pretty unpopular take.
  • I fully support more restrictions on big tech.
    Our government is not here to be their lapdog and supporter.
    Our government is here to keep them, like any other monopolistic companies, in check.
  • Break them up, Amy !!
  • Jerry,
    Great article as usual. My humble opinion is that the tech companies have a right, as a private company, to enact communication policies that benefit their bottom line. However, to restrict the level of viewpoints of different values is not right. In addition, a monopoly of communications should be regulated to the extent it benefits the population, not a few...
  • Usa = new ussr
  • I'm torn. I despise Klobuchar, but applaud this effort. But then, "I'm the government, and I'm here to help" isn't a meme for no reason.
  • Amazon owns one of the biggest marketplaces in the world. Amazon also makes products. Amazon has been known to create in demand products then shut out of their marketplace other businesses that compete with their new products. They know what products to manufacture thanks to the massive amount of data they mine. Not just data from the marketplace, Alexa, AWS, feeds them data so they have a finger on the pulse of consumers far greater than anyone else. Alexa has skills embedded into other people's digital products. So for instance, when you talk to Spotify on your Alexa device, Amazon knows your preferences so they can build their own music services to better compete with Spotify. This is just one example. Amazon also owns a shipping company and gives discounts and perks to sellers who use their shipping services. Some of these perks include elevated search results if you use Amazon's shipping company. Something UPS, FedEx, and the mail service are unable to offer because they don't have access to the merchants in Amazon's marketplace. It's not because Amazon is big and successful that there's a problem. It's because they own the marketplace, and they're a manufacturer of products that are sold in that marketplace where they compete with an unfair advantage, and they own the shipper who also has an unfair advantage to get you those products. It's like in the early 1900's when oil companies began buying up the railroads to ship only their oil and refusing to ship their competitors oil preventing the competition from even getting to the market. Then buying up these struggling oil producers for pennies on the dollar.