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United States Technology

US Senate Bill Would Limit Big Tech Mergers (reuters.com) 30

Two U.S. senators have introduced bipartisan legislation that seeks to make it harder for Amazon and other tech giants to make acquisitions. From a report: The office of Senator Amy Klobuchar, a Democrat who chairs the Senate Judiciary Committee's antitrust panel, said on Friday that she and Republican Tom Cotton had introduced a bill targeting such companies as Alphabet's Google and Facebook. The bill would make it easier for the government to stop deals it believes break antitrust law by requiring the companies to prove to a judge that the deals are good for competition, and therefore legal. A similar bill, introduced by Democratic Representative Hakeem Jeffries and others, has been approved in the House of Representatives Judiciary Committee and awaits a vote by the full House. Traditionally it is up to the government in antitrust enforcement to show a particular transaction would cause prices to rise or is illegal for other reasons. "We're increasingly seeing companies choose to buy their rivals rather than compete," Klobuchar said in a statement. "This bipartisan legislation will put an end to those anticompetitive acquisitions by making it more difficult for dominant digital platforms to eliminate their competitors and enhance the platform's market power."
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US Senate Bill Would Limit Big Tech Mergers

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  • Logically, if an overwhelming market leader significantly strengthens their offering by acquiring another company, that's going to reduce competition by weakening competing players.

    It's not the job of a company to increase the health of the competition in the market. It's the job of a company to win competition, or at least stave off utter defeat.

    So it's really too much, in a market economy, to ask companies to plan their mergers so that they make it better for the opposing players.

    In a tech innovation land
    • Lol the attitude here is so funny. Slashdot can’t stand Facebook and now the government wants greater scrutiny on their deals. The response? Oh we certainly can’t have that.

  • . "We're increasingly seeing companies choose to buy their rivals rather than compete," Klobuchar said in a statement.

    What about start-up companies that are "built to sell"? Create a niche product or service, hype it to hell, then sell it off to [insert big company here] just before the project becomes viable?

    You don't have to build the infrastructure to support you app if you can get FaceTwit to buy it before it collapses under its own overhead...

    • Are you arguing that these bad faith start-ups should be protected?

    • by stikves ( 127823 )

      This will be even easier for the large companies. They will just pick up the pieces.

      Small companies that have a niche product are usually "acqu-hired", i.e.: the large company just wants the team (and usually the code base as well). .

      With no option to be acquired, and with not enough growth to be a viable competitor, these companies will fail.

      As soon as they fail, the assets will be gobbled up in bankruptcy court, along with the team.

      Much cheaper for the large company.

  • Good ... (Score:3, Insightful)

    by Freischutz ( 4776131 ) on Friday November 05, 2021 @01:34PM (#61960713)
    Now crack down on regional monopolies.
  • by jellomizer ( 103300 ) on Friday November 05, 2021 @01:36PM (#61960725)

    It is easy to get politicians of different parties to work together, it just has to be on a topic where their major supporters are not being affected.

    The rise or fall of a Tech company will have little effect on voter turnout. And these companies have traits with both parties seem to dislike, as well if they are big and powerful, they will only take power away from them.

    If this were for Media Companies, or Energy Companies, or heavily unionized sectors, there will be much more partisan bickering.

    • Re: (Score:1, Troll)

      I don't think it is so simple. Tech companies are influential with Democrats, but Dems aren't quite in their pocket. The same goes with Telecom (look at who opposes net neutrality) and pharma (though a few Dems also oppose the price negotiation bill). As Manchin and Sienmna prove, many Dems are beholden to special interests, but this sort of legislation is more communist than almost anything that Tom Cotton calls communist; Cotton is sponsoring this bill precisely because it will weaken the giants of an in
      • Tech companies are also influential with republicans as well. But both sides know tech companies are trying to burn the candle at both ends.

  • by dave314159259 ( 1107469 ) on Friday November 05, 2021 @01:54PM (#61960769)
    This proposed law turns the American principle of governance on its head, from "The government intervenes when you do (or in some cases, are about to do) something bad or harmful" to "You need to get government permission to do an ever-expanding bunch of things the government wants to control".

    FOR SALE CHEAP: Jefferson Mark-1 Constitution. No longer being used.
    • How do you know? The text of the bill isn't on congress.gov yet.

  • A simpler solution might be a progressive tax on market cap. Something like you have to pay a tax of 0% of the first billion,
    0.01% of the second billion, 0.02% of the third billion, etc.. Even at the low rate of 0.01% for every billion dollars of market cap,
    it would make it more and more unprofitable to just grow without limit and it would increase profit for shareholders to spin off
    independent divisions. A 0.01% tax on market cap per billion would only be a 10% tax on a trillion dollar company but that

    • A simpler solution might be a progressive tax on market cap.

      An obvious counter-measure would be the rise of private equity, so there would be no public "market cap".

      Another obvious counter-measure would be to incorporate overseas and operate through a local subsidiary.

  • Isn't the goal of many little startups to get acquired buy a mega company? Were I a big investor -- i am not -- I would be bothered by that limiting factor to the profitability of my investment. It may make them look other places.

    If the goal is to protect smaller companies, then this could help some of them, but would harm others. There has to be a better and more targeted way to regulate large companies.

"The vast majority of successful major crimes against property are perpetrated by individuals abusing positions of trust." -- Lawrence Dalzell

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