The Competition and Antitrust Law Enforcement Act will shift the burden from companies proposing megafusions to prove that their transaction poses no danger to competition.
U.S. companies have practiced more than $ 10 billion in mergers and acquisitions since 2008, and Senator Amy Klobuchar (D-MN) on Thursday announced a bill aimed at ensuring that transactions do not harm consumers or stop competition. .
It is not uncommon, especially in the technology industry, for big players to gain a popular counterpart. (See: Facebook buys Instagram, Twitter buys Vine, Uber buys Postmates.) Klobuchar wants to make sure that ‘established businesses’ do not pose a threat to a business in the market that plays a disruptive role in the market. competition.
“While the United States once had one of the most effective antitrust laws in the world, our economy today faces a major competition problem,” Klobuchar said in a statement. “We can no longer sweep this issue under the rug and hope our existing laws are adequate.”
The intent of the bill, called the Law on the Enforcement of Competition and Antitrust Law, is: ‘To reform the antitrust laws to better protect competition in the U.S. economy, to amend the Clayton Act to amend standard for an illegal acquisition, to deter competing competitors. exclusionary behavior that harms competition and consumers, to improve the ability of the Department of Justice and the Federal Trade Commission to enforce antitrust laws, and for other purposes. “
The bill, which was co-sponsored by Sens. Richard Blumenthal (D-CT), Cory Booker (D-NJ), Edward Markey (D-MA) and Brian Schatz (D-HI), make it clear that the government not only be wary of monopolies but also monopolies. While a monopoly involves a business that sells a good or service, a monopoly involves one who buys a good or service. Both raise concerns about robbery prices (too high if there is only one seller and too low if there is only one buyer), stagnant wages and huge barriers to entry for young businesses. (Read the full account below.)
While competition and vertical integration have been a recurring concern in the ever-consolidating entertainment industry – the most striking example in recent memory has been that AT&T won a trial after the DOJ challenged its $ 85 billion purchase of Time Warner – so far ‘ a monopsony retreat has caused a stir in Hollywood. With the insatiable lust for streaming content, it could become a problem if Amazon buys Netflix, for example.
The bill amends the Clayton Act to lower the threshold for banning mergers that “significantly reduce competition” to those that merely create a significant risk of substantially reducing competition. ‘In some situations – such as mergers worth more than $ 5 billion or those that would give a company a market share of more than 50 per cent – it shifts the burden on the government to prove that there is a risk of harm to the enterprise that it must prove is not one.
It also establishes the office of the Competition Attorney within the FTC and proposes civil fines for antitrust violations up to 15 percent of the company’s U.S. revenue or 30 percent of the revenue of those “illegally acting or targeted.”
To implement the changes, the DOJ’s Antitrust Division would receive $ 484.5 million and the FTC $ 651 million.