America’s lawmakers are intent on beefing up antitrust laws and their enforcement. A new bill from Democratic Senator Amy Klobuchar and several colleagues is a thoughtful blueprint.
Since 2008 the United States has tallied a whopping $10 trillion worth of mergers and acquisitions, according to the bill. Meanwhile agencies tasked with approving or denying deals are starved for resources compared to their corporate charges. Such a lopsided equation means that some transactions that crush competitors can slip through the cracks. In recent years, concerns have also increased that giant technology companies exercise effective monopolies in online activities that aren’t captured by existing laws and legal precedent.
Klobuchar is proposing, for starters, boosting the budgets of the antitrust division of the Justice Department and of the Federal Trade Commission by $300 million each. The funding would help and both the business community and Republicans would probably support it. Both agencies have recently launched lawsuits against Alphabet-owned Google and Facebook, tech titans with a combined market value over $2 trillion.
The bill also seeks to lower the bar on what constitutes market concentration, allowing regulators to scrutinize the long-term implications of deals with smaller immediate effects. For larger mergers, the plan proposes to make the companies concerned prove their tie-up is not harmful to competition rather than requiring enforcers to show it is. Some of the distinctions seem small but make a big legal difference.
Corporate cheerleaders typically worry that heavy-handed rules mean the government will end up picking winners and losers. That’s sometimes a legitimate concern but it calls for consultation and careful legislating, not for ignoring the need to update rules as the landscape changes. Klobuchar’s bill doesn’t single out big tech companies like Amazon.com, Apple, Alphabet and Facebook, though they are the proximate targets. That makes sense: After all, not long ago Walmart was the antitrust boogeyman blamed for squashing smaller retailers.
The bill doesn’t have Republican support and House Democrats may have different ideas. For some colleagues, Klobuchar may not be going far enough. Senator Elizabeth Warren, for example, has called for breaking up Big Tech. Klobuchar’s outline is, however, far better developed than a purely partisan opening bid. Knee-jerk critics in corporate America should consider that the alternatives might be worse.