WASHINGTON— Following Sen. Amy Klobuchar’s (D-MN) introduction of a bill last week aimed reforming “antitrust laws to protect better competition in the American economy,” the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from Aurelien Portuese, ITIF’s director of antitrust and innovation policy:
Sen. Klobuchar’s legislative proposal may radically change antitrust laws and significantly alter the way companies compete and innovate in the American economy. Following the Cicilline Antitrust Report in 2020, which reflected a growing neo-Brandeisian approach to antitrust that sees big as bad, this new bill seeks to codify such an approach into law. It also contains two positive aspects and two worrying ones.
The bill intends to provide more resources to the Federal Trade Commission and the Antitrust Division of the Department of Justice, which is appropriate and necessary. With ever-increasing complexity in firms’ business models and innovation, antitrust enforcers need to be better equipped and staffed to adequately assess potential anticompetitive conduct. The bill also avoids the pitfalls of regulating antitrust issues only applicable to the tech industry, even if the tech industry is the bill’s primary target. The broad scope of the bill avoids the pitfalls of the similar European proposal introduced some weeks ago, targeting more narrowly the Internet industry.
However, core to the bill is the prohibition of almost any acquisitions conducted by large tech companies. To imply that market concentration necessarily leads to anticompetitive practices overlooks both decades of antitrust jurisprudence and comprehensive economic scholarly analysis. Also, start-ups find it increasingly difficult to access capital through venture capital or financial institutions and have a viable long-term goal of acquiring the necessary scale. The bill overlooks the dynamics of these volatile markets and risks hampering innovation.
Finally, the bill condemns “inaccurate economic assumptions that are inconsistent with contemporary economic learning” and endorses the Cicilline report’s recommendations unreservedly. For a legislator to consider other economic analyses as being based on “flawed assumptions” is an unusual and doctrinaire statement. It suggests that any economic expertise which would contradict recent economic consensus on tech companies would be cast aside and characterized as resting upon “flawed assumptions.” This unfortunate portrayal of the necessary economic and legal debates embodies a dangerous politicization of antitrust at a time when scholarly evidence and economic deliberations are most needed. Such politicization may well work for short-term political interests but shall undermine long-term objectives of greater efficiency and more robust innovation in the American economy.