Congressional bills would ban tech mergers over $5 billion

Senator Elizabeth Warren has long made clear that she's no fan of Big Tech, and her latest legislation proves it. She and House Representative Mondaire Jones have introduced legislation in their respective congressional chambers that would effectively ban large technology mergers. The Prohibiting Anticompetitive Mergers Act (PAMA) would make it illegal to pursue "prohibited mergers," including those worth more than $5 billion or which provide market shares beyond 25 percent for employers and 33 percent for sellers.

The bills would also give antitrust regulators more power to halt and review mergers. They would have authority to reject mergers outright, without requiring court orders. They would likewise bar mergers from companies with track records of antitrust violations or other instances of "corporate crime" in the past decade. Officials would have to gauge the impact of these acquisition on labor forces, and wouldn't be allowed to negotiate with the companies to secure "remedies" for clearing mergers.

Crucially, PAMA would formalize procedures for reviewing past mergers and breaking up "harmful deals" that allegedly hurt competition. The Federal Trade Commission has signalled a willingness to split up tech giants like Meta despite approving mergers years earlier. PAMA might make it easier to unwind those acquisitions and force brands like Instagram and WhatsApp to operate as separate businesses.

The act isn't strictly focused on tech, but Warren made clear that industry was a target. She cautioned the FTC on Amazon's proposed buyout of MGM Studios, and challenged Lockheed Martin's since-abandoned attempt to buy Aerojet Rocketdyne.

If it becomes law, PAMA would ban the Amazon-MGM union (worth over $8.4 billion), Microsoft's Activision deal ($68.7 billion) and relatively modest acquisitions like Google's planned buyout of Mandiant ($5.4 billion). Tech firms would largely have to focus on acquiring 'small' companies, and would largely have to forego deals meant to expand market share or otherwise cement dominance in a given market.

However, there are obstacles that might prevent PAMA from reaching President Biden's desk. Both the Senate and House bills have no Republican cosponsors — they're either Democrats or left-leaning independents like Senator Bernie Sanders. That's enough to clear the House, but the Senate bill could fail if it doesn't obtain total support from sitting Democrats. As such, this may represent more of a declaration of Democrats' intentions than a fundamental change in regulatory policies.