The Platform Competition and Opportunity Act will help stop anticompetitive mergers and acquisitions by dominant online platforms
WASHINGTON – U.S. Senators Amy Klobuchar (D-MN), Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, and Tom Cotton (R-AR) introduced bipartisan legislation to make it more difficult for dominant online platforms to make acquisitions that harm competition and eliminate consumer choice.
“Competition is critical to protecting workers and consumers and spurring innovation. But today, we’re increasingly seeing companies choose to buy their rivals rather than compete,” said Klobuchar. “This bipartisan legislation will put an end to those anticompetitive acquisitions by making it more difficult for dominant digital platforms to eliminate their competitors and enhance the platform’s market power. It’s past time to address our nation’s monopoly problem and modernize our antitrust laws for the digital economy.”
“Big tech firms have bought up rivals to crush their competition, expand their monopolistic market share, and to harm working Americans. That’s bad for America. Under this bill, the largest tech monopolies will have the burden of proving that further acquisitions are lawful and good for the American people,” said Cotton.
“For innovation to thrive in our modern economy, start-ups and small businesses must be able to compete directly with industry giants. We must also ensure that consumers can choose what online platform to patronize without one or two companies entrenching the entire market and removing all choice. The Platform Competition and Opportunity Act will help make a stronger online economy to benefit all Americans. I thank Senators Klobuchar and Cotton for joining Rep. Buck and myself in this important bipartisan effort,” said Jeffries.
“The Platform Competition and Opportunity Act will promote a more competitive digital marketplace by giving antitrust enforcers new tools to stop anticompetitive mergers that destroy competition online. Dominant online platforms use acquisitions to neutralize competitive threats, reinforce their monopoly power, and expand their dominance into new markets. This legislation will stop harmful transactions and spur innovation, promote a more vibrant start-up ecosystem, and give consumers more choices by requiring that dominant platforms show that an acquisition will not eliminate potential competitive threats. I applaud Chairwoman Klobuchar and Senator Cotton for leading this important work in the Senate,” said Cicilline.
“Over the past decade, Big Tech has acquired hundreds of companies. In many notable cases, these firms acquired actual or potential rivals to neutralize competitive threats or further expand their dominance. By blocking mergers that primarily serve to kill competition and enhance monopoly power, this bill promotes small business growth, investment, innovation, and consumer choice online. I am grateful for Senator Cotton and Senator Klobuchar’s leadership on this critical legislation. Just as the House Judiciary passed the companion version back in June, the Senate must act swiftly to move this bill,” said Buck.
“If Facebook hadn’t been able to acquire WhatsApp, consumers would still be able to choose between WhatsApp’s privacy-first, 99-cents-a-year subscription service and Facebook’s personal data collection and exploitation-based service. This bill would make it more likely that consumers have access to diverse innovative services that challenge Big Tech’s way of doing business. The bill would require corporations running the largest online platforms to justify big acquisitions, making it harder for them to simply buy and neuter competitors, and further raise entry barriers,” said Sumit Sharma, Senior Researcher, Tech Competition at Consumer Reports.
“Right on the heels of the American Innovation and Choice Online Act, the Platform Competition and Opportunity Act of 2021 is another strong, bipartisan solution for addressing a piece of the Big Tech puzzle. Senators Klobuchar and Cotton should be applauded for this targeted bill to combat one of the major strategies Big Tech uses to entrench its dominance: mergers and acquisitions. With a bill like this in place, truly innovative ideas that are disruptive to the Big Tech status quo will have a chance to flourish. This bill is an important step towards a better internet for users and small businesses alike, free from Big Tech’s control,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge.
“We applaud Sens. Klobuchar and Cotton for developing bi-partisan legislation that aims to prevent platform monopolists from cementing and augmenting their already dangerous levels of power. This bill is an important step toward ensuring that Big Tech platforms cannot continue to fortify and expand their dominance through acquisition, or to eliminate competitive threats simply by buying them. Absent congressional action, platform monopolists will continue to manipulate commerce and communications in ways that threaten our democracy and wreak havoc on the free press, workers, communities, and small businesses across the country. We look forward to working closely with Sen. Klobuchar and other partners to further strengthen this bill, and other legislative efforts to loosen Big Tech’s concentrated control of America’s critical infrastructure of speech and commerce,” said Barry Lynn, Executive Director of the Open Markets Institute.
“Big Tech monopolies have shamelessly gobbled up hundreds of potential competitors over the last decade. Even when faced with historic antitrust enforcement, they have continued to pursue anticompetitive acquisitions. The answer is to make clear that predatory behavior – like Facebook’s acquisitions of Instagram and WhatsApp – will no longer be tolerated. This legislation will do just that and is an important step towards reining in the power of these companies that believe they should be above the law. We are encouraged by the bipartisan interest in this important issue and appreciate the leadership of Sen. Klobuchar to take on the Big Tech monopolies,” said Alex Harman, Competition Policy Advocate at Public Citizen.
"Robust competition is critical to incentivizing companies to deliver high-quality products and services. But Big Tech monopolists have repeatedly taken advantage of our antiquated antitrust laws to buy up nascent competitors and entrench their dominance. And society has paid the price – from the exploitation of small business owners who have nowhere else to go, to Facebook undermining users' privacy on WhatsApp and safety on Instagram, to Amazon’s suppression of wages. The Platform Competition and Opportunity Act puts into place desperately needed guardrails that will force Big Tech to start competing on the merits, leading to more innovation, better choices for consumers, and higher wages for workers,” said Rishi Bharwani, Director of Partnerships and Policy at Accountable Tech.
“Free markets only work if there’s competition. Trillion-dollar Big Tech monopolists like Amazon, Google, Facebook and Apple use their staggering market power to buy start-ups that could threaten their dominance. This unfair and abusive practice prevents competition, crushes small businesses, harms consumers and leads to a decline in innovation. The Internet Accountability Project applauds the leadership of Senators Cotton and Klobuchar for their bipartisan legislation to put the burden on Big Tech to prove their acquisitions won't strengthen their monopolistic market share while still allowing for due process and a day in court,” said Mike Davis, President and Founder of the Internet Accountability Project.
A bipartisan group led by Representative Hakeem Jeffries (D-NY), House Antitrust Subcommittee Chairman David N. Cicilline (D-RI), and Ranking Member Ken Buck (R-CO) introduced a similar version of the bill in the House, which was voted out of the House Judiciary Committee.
At a moment when the digital economy has become highly concentrated and prone to monopolization, the Platform Competition and Opportunity Act will halt further harmful consolidation by:
- Giving antitrust enforcers stronger authority to stop acquisitions by dominant platforms that primarily serve to kill competitive threats or enhance the platform’s monopoly power, including acquisitions:
- Of direct competitors;
- That reinforce or expand a platform’s market position;
- Of potential competitors; and
- Of data that strengthen or expand a platform’s dominance.
- Shifting the burden in merger enforcement to dominant platforms to demonstrate the merger is not anticompetitive.
- Striking the appropriate balance for merger enforcement in digital markets by permitting dominant platforms to make acquisitions that do not threaten competition or enhance monopoly power.
As the Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, Klobuchar is a leading advocate for antitrust reform.
Last month, she and Senator Chuck Grassley (R-IA) introduced the bipartisan American Innovation and Choice Online Act to set commonsense rules of the road for major digital platforms to ensure they cannot unfairly preference their own products and services.
In February, Klobuchar introduced her sweeping legislation to reinvigorate America’s antitrust laws and restore competition to American markets. The Competition and Antitrust Law Enforcement Reform Act will give federal enforcers the resources they need to do their jobs, strengthen prohibitions on anticompetitive conduct and mergers, and make additional reforms to improve enforcement.
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