Senator Elizabeth Warren has long made it clear that she is not a fan of big tech, and her latest legislation proves it. She and Rep. Mondar Jones introduced legislation in their respective houses of Congress that would effectively ban major technology mergers. The Anti-Competitive Merger Prohibition Act (PAMA) would make it illegal to conduct “prohibited mergers,” including those that cost more than $5 billion or provide a market share above 25 percent for employers and 33 percent for merchants.
The bills will also give antitrust regulators more power to stop and review mergers. They will have the right to directly reject mergers without requiring a court order. They would also ban mergers by companies with a reputation for antitrust violations or other cases of “corporate crime” in the past decade. Officials will have to evaluate the impact of these acquisitions on the workforce and will not be allowed to negotiate with companies to secure “remedies” for clearing mergers.
It is important to note that PAMA formalizes procedures for reviewing past mergers and terminating “harmful deals” that allegedly hurt competition. The Federal Trade Commission has said it is ready to split up tech giants like Meta, even though they approved mergers a few years ago. PAMA could make these acquisitions easier to roll out and make brands like Instagram and WhatsApp operate as separate companies.
The law isn’t strictly technology-focused, but Warren made it clear that industry was the target. She alerted the FTC to Amazon’s offer to buy out MGM Studios and disputed Lockheed Martin’s long-abandoned attempt to buy Rocketdyne’s Aerojet.
If it becomes law, PAMA would ban the Amazon-MGM alliance (worth over $8.4 billion), Microsoft’s deal with Activision ($68.7 billion), and relatively modest acquisitions such as Google’s planned buyout of Mandiant ($5.4 billion). dollars). Tech firms will largely have to focus on acquiring “small” companies and will largely have to forego deals aimed at gaining market share or otherwise consolidate dominance in a given market.
However, there are obstacles that could prevent PAMA from reaching President Biden’s desk. Senate and House bills don’t have Republican co-sponsors—they’re either Democrats or independent leftists like Senator Bernie Sanders. That’s enough to clear the House of Representatives, but the Senate bill could fail if it doesn’t get full support from incumbent Democrats. Thus, this may represent more of a statement of Democratic intent than a fundamental change in regulatory policy.
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