Senator Josh Hawley (R-MO) today touted a new proposal he calls a “trust busting plan” that calls for a new standard for antitrust intervention to replace the legal principle of consumer harm. While the plan is not accompanied by specific legislation, Competitive Enterprise Institute experts weighed in on the Senator’s proposal.
Director of CEI’s Center for Technology and Innovation Jessica Melugin said:
“Senator Hawley claims that allowing the tech industry to operate in a relatively free market ‘hasn’t been a success for the American consumer,’ but if there’s consumer harm to point to, why does he advocate for abandoning the consumer harm standard in U.S. antitrust law? Perhaps it’s because consumers have enjoyed consistent innovations in products and services from ‘big tech,’ especially while quarantining during the pandemic and often at no monetary cost to them. Similarly, his claims that the industry, ‘hasn’t been a success…for the American economy,’ don’t ring true for so many Americans that are employed by or invested in these economic powerhouses, not to mention the millions of consumers who enjoy tech products.”
Senior Fellow Ryan Young said:
“One of the most problematic parts of Sen. Hawley’s antitrust plan is its proposed ban of mergers and acquisitions for companies larger than $100 billion in annual revenues. Startups need capital to compete in the big leagues. But financial regulations, especially in the post-Dodd-Frank era, make it difficult for smaller companies to hold IPOs or attract other forms of investment. So, they instead get their capital by being bought out by one of the big tech companies.
“The regulatory situation is so bad that many promising startups are founded with the explicit goal of selling out to a bigger company. If Sen. Hawley wants fewer acquisitions by big companies, he should focus on the root cause of bad financial regulations, rather than the feel-good populism of banning mergers and acquisitions.
“Then again, the feel-good populism is likely the point. Hawley’s proposal is unlikely to become law. For him, antitrust policy is just another culture war issue. He wants to fire up his base and provoke his opponents. In this sense, his antitrust proposal is no different than his similarly unserious proposals to ban infinite scrolling in social media apps and to have the federal government regulate political speech.”
For more information on CEI’s position on antitrust, please visit cei.org/antitrust.