New Anti-Merger Bill Not Indexed for Inflation

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Yesterday, I wrote about four problems with Sen. Elizabeth Warren (D-MA) and Rep. Mondaire Jones (D-NY)’s new antitrust bill, the Prohibiting Anti-Competitive Mergers Act. There is a fifth problem: Its $5 billion threshold for automatically rejecting mergers is not indexed for inflation.

That is important. If inflation continues at its current 7.9 percent annual rate, the $5 billion threshold would fall to $4.6 billion in current dollars after just one year. Even if inflation gets back under control relatively quickly, this “bracket creep” effect would, after a few years, increasingly affect mergers outside of Sen. Warren and Rep. James’ big tech targets. Maybe this is by design, and maybe it isn’t. Either way, it’s bad policy.

Mission creep is a serious problem in antitrust policy, as I also pointed out earlier this week in a letter to a conservative state attorney general who wants to use antitrust enforcement to punish progressive political advocacy. Antitrust policy is supposed to be about competition.

The neo-Brandeisian movement that inspired the Warren-Jones bill also wants to expand antitrust regulation. Its advocates see it as a way to address economic inequality, democracy, and climate change, among other competition-unrelated issues.

This new bill, advertised at targeting big tech companies, would, after a few years of even moderate inflation, make that kind of mission creep inevitable. It would affect industries with low levels of market concentration and little to do with today’s tech bugbears. And it would have a chilling effect across the economy on new innovations and new ways to find lower prices for consumers.