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The One Big Tech Bill That Could Backfire Spectacularly
Congress wants to stop most Big Tech acquisitions. But that won’t necessarily increase competition.
The following is an update from Big Technology, a newsletter by Alex Kantrowitz. To get it in your inbox each week, you can sign up here.
When writing antitrust legislation, you want to be precise. The key is to fire a well-guided missile to flatten the competitive landscape, not a dumb rocket that causes collateral damage.
Well, in its ambitious package of Big Tech antitrust legislation, Congress may have shot a dumb rocket. The Platform Competition and Opportunity Act, one of the five bills introduced last week, would effectively put an end to the tech giants’ ability to make acquisitions. Big Tech has acquired plenty of competitors over the years and either captured their growth or shut them down, so the act might seem logical. But such a broad ban could have serious unintended consequences and lead to less competition, not more.
The prospect of an acquisition — regardless of whether it takes place — tends to encourage productive behavior. Potential acquirers often hold off on copying startups’ products, understanding there’s a chance they’ll one day join forces. And startups typically press forward even…
