New draft guidelines released by U.S. antitrust enforcers on Wednesday lay the groundwork for tougher scrutiny of planned mergers by Big Tech companies like Amazon and Alphabet’s Google.
The Biden administration has taken a tougher stance on mergers, filing some aggressive challenges. It had two court losses just last week. Several challenges go before judges in the next few months, including the Justice Department’s fight against JetBlue’s purchase of Spirit.
The 51 pages of guidelines by the Justice Department and Federal Trade Commission described, without naming them, deals like Amazon’s purchases of video doorbell Ring in 2018, and said the antitrust agencies should scrutinize them.
“A platform operator that is also a platform participant has a conflict of interest from the incentive to give its own products and services an advantage against other competitors participating on the platform, harming competition,” the draft guidelines say.
The draft also specifies that a merger should not eliminate a potential entrant in a concentrated market or create a situation in which a firm buys a company that provides inputs for the acquirer’s competitors.
The Biden administration’s antitrust enforcement has highlighted labour issues, and the guidelines reflect that.
“Where a merger between employers may substantially lessen competition for workers, that reduction in labour market competition may lower wages or slow wage growth, worsen benefits or working conditions,” the guidelines say.
The guidelines reflect how the FTC and Justice Department currently enforce laws against illegal mergers, which would replace guidelines from 2010 on companies buying competitors and 2020 guidelines on companies merging with suppliers.
President Joe Biden urged that the guidelines be updated in a mid-2021 executive order. They will be open for comment for 60 days before they are finalized.
© Thomson Reuters 2023
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