Wash. Democrat Jayapal Wants FTC Scrutiny of Amazon-MGM Deal
The FTC should look “very closely” at Amazon’s purchase of MGM (see 2203170007), Rep. Pramila Jayapal, D-Wash., said Thursday. The agency didn’t challenge the deal before it closed in March, but Chair Lina Khan has been without a Democratic majority since October. The Senate confirmed Commissioner Alvaro Bedoya this week, restoring the majority (see 2205110069). The FTC said in August the “the law permits the antitrust agencies to determine that a merger is illegal even after the companies have merged.”
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New merger rules and policies under Khan have been a major step forward, said Jayapal during an Axios livestream: Enforcers are realizing they need to take a longer view of the impact of mergers five to 10 years down the road.
Khan gave separate remarks at a Thursday listening session with DOJ Antitrust Division Chief Jonathan Kanter, echoing Jayapal’s comments about shifting antitrust views. Enforcers should pay close attention to under-the-radar transactions and be more “vigilant” about smaller deals, said Khan: Sometimes competitors are acquired before they can emerge as real threats to the incumbent, especially in high-tech markets.
FTC Commissioner Noah Phillips at the Axios event spoke against policies meant to “slow and tax” mergers and acquisitions, which he said hurts smaller companies more than the incumbents. The FTC should be going after “bad deals” and allow markets to work otherwise, he said. He said he looks forward to welcoming Bedoya, who will bring a “thoughtful, deliberative” approach to the agency.
Senate Intelligence Committee Chairman Mark Warner, D-Va., told us Thursday he supports the agency moving forward with a privacy rulemaking, a possibility widely discussed, given Bedoya’s privacy expertise (see 2204180049). The vast majority of Big Tech platforms support an agency rulemaking, though they may not agree with all the details, said Warner: It would provide more certainty in the face of 50 different state laws.
The House Judiciary Committee should hold a hearing with intelligence officials to explore security issues about advancing antitrust legislation that would mean major changes for the app store market (see 2204150040), Rep. Eric Swalwell, D-Calif., told the Axios event. “Reforms” are needed for social media, apps and the internet, but Congress shouldn’t “throw the baby out with the bath water,” he said, citing the importance of the tech economy to California. Swalwell raised security concerns about side-loading, which would force apps to open their products. He credited sponsors of the antitrust legislation but noted there hasn’t been a hearing with the NSA or FBI. The bill would turn app stores from curated, secure stores into “flea markets,” he said.
The security argument is a “red herring,” said Jayapal. This is about ensuring small businesses have a fair shot and consumers have choices, she said, noting the rare, bipartisan support for the antitrust package through the House Judiciary Committee. Asked about California opposition to the antitrust package (see 2107060072), Sen. Alex Padilla, D-Calif., told us Thursday: “I support the intent, but I know how complex technology policy can be, so we’ve got to make sure we get it right.”
T-Mobile’s merger with Sprint resulted in fewer job options and lower wages for wireless retail workers, T-Mobile call center employee Greg Caron told Khan and Kanter during the listening session. “Even though T-Mobile continues to be a profitable company, they are sharing less of those profits with workers since the merger. I’ve seen co-workers get laid off and promised raises fail to materialize,” Caron said. Enforcers need to hold companies accountable for their promises made during merger review, he said. T-Mobile didn’t comment.
The FTC and DOJ have received more than 5,000 comments for the joint merger guideline review, Kanter said during the listening session. The agencies will release draft guidance later for further comment, he said. There's no more consequential a topic in antitrust now than digital markets, he said.