Washington – Several Democrats have introduced legislation today that would preemptively block many mergers and acquisitions, in particular in the tech industry. According to news reports, the Prohibiting Anticompetitive Mergers Act would completely overhaul the review process of mergers and acquisitions by the Department of Justice and Federal Trade Commission.
The proposal would allow the DOJ and FTC to automatically block transactions worth more than $5 billion or those leading to high market shares without judicial oversight. In addition, the FTC and DOJ could retroactively reverse certain mergers if they lead to a greater than 50 percent market share based on after-the-fact agency determinations. Court challenges of automatically blocked mergers would only be allowed if the reviewing agency acted in an “arbitrary or capricious” manner.
The Computer & Communications Industry Association, an international not for profit tech trade association, has advocated for competition in the tech industry for 50 years.
The following can be attributed CCIA President Matt Schruers:
“This preemptive ban on mergers over an arbitrary size would harm both competition and consumers. Instead of enforcers continuing to evaluate transactions based upon whether they would substantially lessen competition, the bill would arbitrarily prohibit transactions that can bring significant benefits to consumers and the economy. This approach is ill-advised as it would eliminate judicial checks and balances that courts provide to ensure the merger review process remains apolitical.
“The bill erodes the authority of enforcement experts that already have the authority to unwind transactions when necessary.
“Instead of arbitrarily barring certain transactions, Congress should instead provide the resources necessary for the FTC and DOJ to do the job they are charged with: protecting competition and consumers.”