[ad_1]
WASHINGTON — Senior federal antitrust officials on Tuesday announced that they are reviewing how they have approved mergers and acquisitions in a broad effort to strengthen enforcement and stem the volatility of corporate consolidation, particularly in high-tech.
Federal Trade Commission chair Lina Khan and Justice Department antitrust head Jonathan Kanter said they wanted to rewrite merger guidelines created a dozen years ago because they didn’t directly address the unique issues posed by the tech industry. .
The review will focus on how the merger review process applies to free services like Google and Facebook. Often, price increases are an important measure for anticompetitive behavior, but this standard does not apply to advertising-based business models that offer free services to consumers. Regulators will also look at how emerging competitors might be affected by a merger. For example, the FTC is suing Facebook to split up because of its 2012 acquisitions of Instagram and 2014, when those services are not direct competitors to Facebook.
Democratic regulators and lawmakers are racing to deliver on promises to curb the dominance and power of a handful of tech giants, including Amazon, Apple, Facebook and Google. A Senate panel is expected to vote this week on the law, which aims to prevent powerful digital platforms like Apple’s App Store and Amazon’s marketplace from blocking competitors.
President Biden has told institutions to review the guidelines as part of efforts to strengthen enforcement of merger rules. It has chosen tech giants harsh critics to spearhead its antitrust efforts, but agencies led by Ms. Khan and Mr. Kanter have struggled to keep up with the rise in corporate acquisitions. Khan said global mergers were worth a record $5.8 trillion in 2021, doubling the burden of merger investigations at the FTC and the Justice Department.
Regulators have also said they are interested in broadening the scope of antitrust enforcement to take into account the potential ripple effects of corporate concentration on labor markets, innovation and consumer protection.
“This investigation, initiated by the FTC and DOJ, is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to enforce the law against illegal deals,” Ms Khan said. Said.
Last year, the FTC began a review of guidelines for vertical mergers, called acquisitions of adjacent markets of companies that are part of a supply chain. Tech companies have acquired numerous companies that don’t compete directly with their core businesses, but help giants like Facebook, Amazon, and Google spread their tentacles into new markets and maintain their dominance. argued. An example of this activity is Microsoft, whose core business is enterprise and consumer software, announced on Tuesday that it will buy game maker Activision Blizzard for approximately $70 billion. Regulators declined to comment on the deal.
Regulators may face challenges with the revised rules in the courts. Judges have stuck to decades-old interpretations of antitrust laws that hold consumer prices as the primary test for monopolization. It is expected that it will take about a year for the agencies to rewrite the merger rules.
[ad_2]
Source link