Last week, Senator Elizabeth Warren (D-Mass.) and Representative Mondaire Jones (D-N.Y.) introduced the “Prohibiting Anticompetitive Mergers Act,” legislation that would empower the Biden Administration to unilaterally block mergers worth more than $5 billion.
This bill is the latest piece of the Democrat antitrust agenda and show’s the left’s zeal to put unelected bureaucrats in charge of reshaping capitalism. While it is unlikely to pass during this Congress, it shows that if you give the antitrust “reformers” an inch, they will take a mile.
The legislation would require the Biden Federal Trade Commission and Department of Justice to overhaul their merger review processes to make it virtually impossible for companies to challenge their decisions. Companies have the ability to appeal blocked mergers in federal court, but the appeal would only be allowed to proceed if the agency is found to have acted in an “arbitrary or capricious manner” in stopping it.
The bill would also allow the FTC and DOJ to retroactively break up “harmful deals that have destroyed competition” that led to a 50 percent market share. Every company that merged or acquired another company will be looking over its shoulder for an overzealous Biden regulator to come and break it up, creating an enormous amount of economic uncertainty.
The sponsor list is a who’s who of the left, including socialists Senator Bernie Sanders (Vt.) and Representative Alexandria Ocasio-Cortez (N.Y.).
Warren’s motivation behind this bill is simple. Warren believes that government bureaucrats should have the power to command and control the American economy, no matter if it harms consumers via higher prices or reduced choices.
With this legislation, sponsors ignore the clear benefit that M+A activity has for consumers and companies alike. Banning mergers over a certain threshold would likely lead to fewer innovative startups, half of which say their most realistic long-term goal is to be acquired by a larger firm. Without the potential for acquisition, entrepreneurs would have a lot less incentive to take on the risk that comes with starting a new company. This would lead to a lot less choice and access to innovative new products for consumers.
While Senator Amy Klobuchar (D-Minn.) may point to her antitrust bills as a “moderate” alternative to the Warren bill, nothing could be further from the truth. Klobuchar’s self-preferencing bill would give similar latitude to Biden’s antitrust enforcers, and her merger bill would enact similar restrictions on M+A activity.
The Prohibiting Anticompetitive Mergers Act shows the left’s antitrust end game. Conservatives should reject this blatant government power grab.