Big Tech Mergers and Acquisitions Fully Banned... US Congress Draws Antitrust Sword

Source: SCMP

[Asia Economy Reporter Yujin Cho] A bill aimed at curbing mergers and acquisitions (M&A) attempts by big tech companies to eliminate competitors is being pushed in the U.S. Congress.

The House Judiciary Committee officially approved a 400-page report on the 15th (local time) concluding that big tech companies have been acquiring or eliminating competitors through indiscriminate M&A.

Based on this report, the House Judiciary Committee plans to draft antitrust legislation to control the market dominance of big tech companies such as Google, Amazon, Facebook, and Apple.

Representative David Cicilline stated in a press release, "Big tech companies have enjoyed monopolistic power over important sectors of our economy, and this situation must end," adding, "I hope legislation addressing the concerns we raised will be created."

The report includes measures to prevent Amazon from engaging in monopolistic practices by abusing its market dominance and to expand the authority of agencies enforcing antitrust laws by increasing their budgets. It also contains provisions to block antitrust violations by big tech companies attempting M&A to maintain monopolistic market positions, similar to Facebook’s past acquisition of Instagram to eliminate potential competitors.

With the U.S. Department of Justice and the Federal Communications Commission (FCC) having already launched antitrust investigations into big tech companies, this report is expected to further ignite legislative discussions.

In particular, the report includes content reducing the immunity of social media companies for user-generated content, which the FCC is aggressively pursuing. The FCC announced in October last year that it would work on regulations to clarify the scope of Section 230 of the Communications Decency Act (CDA).

Section 230 of the Communications Decency Act protects online platforms like Facebook and YouTube from legal liability for content created and posted by their users, and former President Donald Trump signed an executive order to reduce these immunity protections for such online platforms.

Two days earlier, Senator Josh Hawley also introduced a bill banning M&A by big tech companies. If passed, this bill, which prohibits companies with a market capitalization over $100 billion from acquiring competitors, would prevent the five major U.S. big tech companies?Google, Amazon, Facebook, Apple, and Microsoft?from acquiring other companies.

Senator Hawley, a prominent critic of big tech, claimed in submitting the so-called "21st Century Antitrust Act" that big tech companies are biased against conservatives. He argued, "Big tech companies suppress the opinions of conservative Republican supporters, and their expansion needs to be limited."

This bill contains the same regulatory provisions as the antitrust bill unveiled by Democratic Senator Amy Klobuchar in February. Hawley stated, "I am willing to cooperate with any party," and added, "I agree with Senator Klobuchar’s views."

If this bill passes, the Federal Trade Commission (FTC) will have the authority to designate companies exerting dominant power in specific internet markets as ‘dominant digital companies’ and prohibit them from acquiring potential competitors.