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US Senator wants to ban all future acquisitions by Big Tech

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In line with growing calls for antitrust regulation in the US, Republican Senator Josh Hawley has introduced legislation calling for the ban of all mergers and acquisitions by companies with a market cap of over $100 billion, presumably targeting Big Tech companies Microsoft, Google, Apple, Amazon and Facebook.

Called the “Trust-Busting for the Twenty-First Century Act”, Hawley’s bill proposes overhauling century-old anti-trust and competition laws such as the Sherman Act and the Clayton Act. Hawley wants to clearly define the anti-competitive behaviour under the Federal Trade Commission (FTC) instead of getting bogged down by lawyers and economists.

Other proposals under the bill:

  • FTC should be able to designate “dominant digital firms” and can block their buyouts of potential competitors.
  • Big companies like Google cannot prioritise their own products over others on a search engine.
  • Vertical mergers will be subject to antitrust scrutiny.
  • Any company found guilty of anti-competitive behaviour would be heavily fined, and will have to forfeit profits resulting from their monopolistic conduct.

“A small group of woke mega-corporations control the products Americans can buy, the information Americans can receive, and the speech Americans can engage in. These monopoly powers control our speech, our economy, our country, and their control has only grown because Washington has aided and abetted their quest for endless power,” Hawley said in a press note.

Why this is significant

With both upper and lower houses of the US legislature controlled by Democrats, Senator Hawley’s bill is unlikely to get very far. However, it is in line with the almost-bipartisan support for the general idea for regulation of Big Tech. Democratic Senator Amy Klobuchar, head of the Senate Subcommittee on Antitrust Competition Policy and Consumer Rights, in February introduced the Antitrust Law Enforcement Reform Act.

Both Hawley and Klobuchar agree on one thing — that the age-old laws need to be amended to identify anti-competitive practices beforehand rather than evaluating mergers after.

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However, Hawley’s “woke mega-corporations” comment is overarching the Republican anger over “censorship” by Big Tech. Hawley had teamed up Ted Cruz to help Donald Trump overturn the election loss, and was seen as a supporter of the violent insurrection at Capitol Hill. Trump was later banned from social media over allegations that his comments may have incited the mob.

“Their efforts to influence or outright stop voting laws in various states, this is indicative I think of the kind of very significant and growing political power that the largest concentrated corporations the mega corporations have in this country and are willing to use today,” Hawley told CBS News. “Today it is election integrity, tomorrow it will be something else. The point is that their political power is tracking their economic power.”

In the US, Google is facing three separate antitrust cases by the US Department of Justice, a group of 38 US states led by Colorado and Nebraska Attorney General, and another group of 15 states led by Texas. The case led by Texas alleges an advertising nexus with Facebook and a search engine monopoly arrangement with Apple. Meanwhile, Facebook has been separately sued by the US FTC and states for social networking monopoly and anticompetitive conduct, especially with its acquisitions of WhatsApp and Instagram.

Trouble brewing for Big Tech

There is growing consensus among governments for the need to rein in Big Tech companies. The Competition Commission of India (CCI) last year opened an investigation into Google for allegedly forcing Android app developers to integrate the Google Pay app for payments. The company faced another antitrust hurdle later on for allegedly abusing its Android OS dominance in the smart TV market.

Meanwhile, Amazon India may face an investigation as CCI has received a complaint by a group of small online sellers that the eCommerce giant favours certain sellers in which it has an equity stake. The CCI recently ordered an investigation into Facebook-owned WhatsApp’s controversial policy update. The Delhi High Court yesterday reserved its judgment on a plea by WhatsApp seeking quashing of the CCI investigative order.

Big Tech is running into problems almost on every continent. The European Union is mulling regulating Big Tech and has threatened large fines for non-compliance with two new laws – the Digital Services Act and the Digital Markets Act. The EU wants to prevent the big corporations from ranking their own services above other small players on search engines and app stores.

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Earlier this month the UK launched a new regulatory body, Digital Markets Unit, to keep an eye on anticompetitive behaviour among tech companies. Japan’s Fair Trade Commission (FTC) too is closely watching Big Tech and the lawsuits they face in Western countries. The FTC head said Japan would open a probe into any merger or acquisition that it feels is big enough to dissuade competition.

Most recently, China fined Jack Ma’s Alibaba to the tune of $2.8 billion for anti-competitive behaviour.  The country’s competition watchdog has also warned 34 tech firms to realign their operations after an antitrust review.

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