We likely would agree that life overall in the United States has become better than it was 130 years ago. After all, there are more options to help build businesses and live more comfortable lives than would have been possible four generations earlier. The Arizona Technology Council’s efforts showcased in this and previous sections of this publication are very much about furthering this evolution.
Through our representing an industry responsible for much of the innovation that has driven much of our growth, we can attest that the nation is a different place than when the Sherman Antitrust Act of 1890 was enacted. If you’re a little fuzzy on the law, it was created to curb power that interfered with trade and cut into economic competition.
We now live in a country where someone with a small company based in New River has as much chance of bringing the next great thing to market as a firm in New York. Startups have become dependent on a thriving ecosystem of investment capital and successful exits. Success often is measured by a smaller company becoming part of a larger, established enterprise. It’s indeed a different time.
Now, Congress is considering measures that could unravel these opportunities for others. Several antitrust bills — including the Platform Competition and Opportunity Act being considered in separate measures in both chambers — could take us back to the equivalent of the horse and buggy days.
While the intent of the two proposed acts is arguably focused on a handful of large companies, passage of such legislation will have unintended negative impacts on the smaller members of technology sectors that have become critical parts of our economy.
The most significant of these impacts would be driven by language limiting merger and acquisition activity for startups. According to a recent report by the bipartisan policy research organization Center for Strategic and International Studies (CSIS), the intent is to prevent anticompetitive effects through a ban on dominant platforms buying current or potential competitors.
Instead, according to the report, the bills “would substantially alter merger and acquisition review standards for a small number of dominant companies, raising concerns that the requirement to present ‘clear and convincing’ evidence of the absence of potential harm could create a chilling effect that would significantly decrease acquisitions by covered platforms.”
Monopolies can be regulated sufficiently through well-established laws, including the Clayton Antitrust Act of 1914. Overarching regulation of company size and growth does little to promote a healthy innovation economy or regulate social media platforms.
CSIS raises another frightening possibility with the passage of two other bills, the Senate’s American Innovation and Choice Online Act and the House’s similar American Choice and Innovation Online Act. Opponents of the two measures have expressed concerns that the nondiscrimination provisions in the bills prevent attempts by digital platforms to remove misinformation, hate speech and other harmful content. This would contribute to the unraveling of efforts to build a diversity, equity and inclusion culture.
We encourage Congress — and you — to research what proposed antitrust legislation really could do to the innovation economy in the United States. Yes, “monopoly” is a scary word, but it’s scarier to roll the dice and risk losing the entire game.
