Oct 3, 2022 - Economy

Mergers fees are the only antitrust common ground

Illustration of a scale with colored shapes and images of dollars.

Illustration: Gabriella Turrisi/Axios

There have been years of big talk from Washington about tamping down on mergers that stifle market competition. Now, a bill that’s actually likely to reach the president’s desk is focused on the only thing everyone could agree on: upping regulatory merger fees (and funding for regulators).

Why it matters: It highlights the ongoing gap between Washington and the business world, and among various lawmakers (and the lobbyists they listen to).

Driving the news: Last week, the House passed the Merger Filing Fee Modernization Act, a bill that helps state attorneys general bring antitrust cases in the venues of their choice. It also requires merging parties to notify antitrust regulators if they’re subsidized by entities that are "strategic or economic threats" to the U.S.

  • The Senate, which has passed its own version of the fee bill, will now have to vote to approve the House package.
  • The White House’s full-throated endorsement of the House bills means President Biden is most certainly going to rubber stamp them.

The big picture: In the last several years, Washington’s scrutiny of big tech companies has largely coalesced around calls to stem what critics view as various anti-competitive behaviors.

  • Some proposed laws have focused on the slew of marketplaces these companies operate, like mobile app stores and e-commerce websites.
  • But mergers and acquisitions (M&A) has also been a popular target, with lawmakers arguing that big acquisitions do a lot of harm to consumers and the market.

Zooming in: Increasing fees on transactions above $5 billion and lowering them for small deals is about as uncontroversial as it can get.

  • Even lobby groups that typically work to keep M&A activity as free-flowing as possible didn’t spend much (if any) energy talking to lawmakers about it.

Instead, they’re much more worried about bills like the Platform Competition and Opportunity Act, which would prevent big tech companies from making new acquisitions — an obvious disaster if you're one of those companies, or a smaller one hoping to get bought by a Silicon Valley giant.

Between the lines: Whether tech M&A is bad for small startups, the markets in which they compete with Big Tech, consumers and other stakeholders is where the biggest disagreement gap lies.

  • While critics focus on cases in which large tech companies acquire nascent potential competitors and shut them down, startupland views this exit option as a critical incentive to keep entrepreneurship going.

Yes, but: Even this set of bills had some critics.

  • "These bills are detrimental to law-abiding Americans and give more cash handouts to radical agencies pursuing Biden’s progressive agenda, like the FTC," NetChoice vice president Carl Szabo said in a statement.
  • The U.S. Chamber of Commerce and other business groups also opposed the bills.

The bottom line: The need to regulate M&A is about all anyone can agree on right now.

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