/https://specials-images.forbesimg.com/imageserve/601c1f5bb5788e1bf3fd7756/0x0.jpg?cropX1=0&cropX2=3718&cropY1=386&cropY2=2479&w=1200&resize=1200,676&ssl=1 "Sen. Klobuchar’s Sweeping New Antitrust Proposal Would Make Big Tech Acquisitions More Challenging")
Topline
Sen. Amy Klobuchar (D. Minn.), the new head of the Senate’s antitrust subcommittee, has unveiled a sweeping antitrust bill that would put the onus on dominant companies to prove that proposed acquisitions would not affect competition in order to win regulatory approval, a move that comes after years of scrutiny into major acquisitions by big tech companies that have allowed them to consolidate their dominance.
Senator Amy Klobuchar has unveiled a sweeping new proposal to tackle antitrust behavior by large … [+]
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Key Facts
According to a draft of the proposed legislation, the burden of proof on if an acquisition will negatively impact competition will now rest on the dominant companies making the acquisition instead of the government.
In addition to making acquisitions more difficult the bill also places greater legal burdens on dominant firms in scenarios where they engage in conduct that deprives other companies of opportunities to compete.
The bill also seeks a $300 million increase in annual funding for the Department of Justice’s Antitrust Division and the Federal Trade Commission, which enforce antitrust laws.
Additionally, the proposed legislation would allow antitrust enforcers to impose civil penalties for violations of antitrust laws, on top of their existing remedies.
The bill if passed would in effect make it harder for companies like Google or Facebook to pull off some of the transformational acquisitions of smaller companies they have made in recent years, such as their purchases of YouTube and Instagram.
Tangent
House’s antitrust subcommittee Chairman Rep. David Cicilline (D-R.I.) is also drafting his own antitrust legislative proposal to tackle the market dominance of big tech companies like Facebook, Google, Amazon and Apple. While Cicilline has not released his full proposal, according to the Wall Street Journal, he is considering rules that would ban large companies like Amazon from serving in a dual role of both running an e-commerce platform and selling its own products on the same platform in competition with third-party vendors.
Crucial Quote
“Let’s be clear: we have a monopoly problem. But we can’t take on the biggest companies in the world with just Band-Aids and duct tape. We need legislation that will increase enforcement resources & tighten our antitrust laws—so I’m introducing a new bill that will do just that,” Klobuchar tweeted on Thursday.
Key Background
Alleged antitrust violations by the big tech companies have drawn significant bipartisan attention even though members of both parties don’t exactly agree on the proposed remedies. Last year in November, the DOJ and multiple U.S. states moved to file a sweeping antitrust case against Google accusing the company of misusing its position as the dominant search engine. A month later, 48 U.S. states, territories and the Federal Trade Commission filed an antitrust case against Facebook calling for it to be split up. Klobuchar’s sweeping proposal, however, is likely to face pushback from Republicans and the big tech companies, who deny that they engage in anticompetitive behavior.
Further Reading
Klobuchar to Introduce Antitrust Bill Raising Bar for Technology Deals (The Wall Street Journal)
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