Cheat Sheet: What a ‘radical’ GOP antitrust bill that would kill big tech acquisitions has in common with the Democrats’ push for reform
By Kate Kaye
Republican Sen. Josh Hawley of Missouri has put what he called “woke mega-corporations” on notice, particularly tech platform giants including Facebook and Google.
However, new antitrust legislation he proposed could place drastic new restrictions on all sorts of big businesses.
Despite some similarities to a recent antitrust reform bill from Sen. Amy Klobuchar of Minnesota, bipartisan momentum behind Hawley’s bill is likely to be tepid at best considering his polarizing push to contest the Electoral College vote on Jan. 6 certifying Joseph Biden as president. Still, the legislation could step up congressional dialogue around updating the government’s approach to defining what anti-competitive behavior looks like in a tech-ruled era.
Hawley’s bill is bold and could start a more vibrant discussion around antitrust reform in the Senate, suggested Barry Pupkin, a senior partner focused on antitrust at law firm Squire Patton Boggs. “It seems sort of, I guess, radical,” he said. “I think you straitjacket a lot of possibly decent transactions,” Pupkin continued, adding, “I think though, it starts a dialogue.”
So, what’s so radical about it? Here’s what Hawley’s Trust-Busting for the Twenty-First Century Act, introduced on April 12, proposes:
- It would prohibit “dominant digital firms” such as Amazon, Apple, Facebook and Google from making any acquisition worth over $1 million — effectively squashing any tech-related acquisitions.
- It defines a “dominant digital firm” broadly as one that possesses dominant market power related to a website or internet service.
- It would touch companies way beyond big tech. It would preclude any company with a market cap over $100 billion from making acquisitions that lessen competition, meaning corporations including Johnson & Johnson, Procter & Gamble, Walmart, Disney and Netflix would think twice before attempting to buy or merge with other companies.
- It would update the Federal Trade Commission’s authority over antitrust regulation by giving the FTC the authority to investigate a dominant digital firm.
- In addition to potentially preventing a variety of acquisitions, the legislation would require companies found in violation of updated antitrust rules to forfeit profits derived from business or acquisitions related to activity found to be anti-competitive.
The Democratic bill
On the other side of the aisle, an antitrust reform bill introduced in February by Democratic Sen. Amy Klobuchar, gives both the FTC and the Justice Department, the federal government’s other trust-busting agency, more penalty power against companies, more resources and more money for hiring additional personnel. Here’s what’s important:
- Klobuchar’s Competition and Antitrust Law Enforcement Reform Act would nearly double the FTC’s annual budget and boost the DOJ’s antitrust division’s budget, funding that will help attract more knowledgeable tech experts.
- It would establish a new Division of Market Analysis inside the FTC to conduct investigations, publish reports evaluating the competitive conditions and dynamics affecting markets, assess the competitive effects of acquisitions after they are completed and recommend enforcement actions to remedy anti-competitive impact.
- Klobuchar has made antitrust a primary mission as powerful chair of the Senate Judiciary’s antitrust subcommittee, on which Hawley sits as a minority …read more