Presidential hopeful Sen. Elizabeth Warren is drafting a sweeping piece of legislation that would go far beyond breaking and blocking deals between companies and would exert more control over some of America’s largest firms.
People with knowledge of the bill and who support it say the measure takes important steps towards clarifying the rule book under which the country’s largest companies play, after years of lax or incomplete oversight. Its detractors, including academics and antitrust lawyers who spoke with CNBC on the condition of anonymity, say it takes unprecedented steps to legislate America’s largest companies that undoes decades of jurisprudence and weakens the country’s competitive stance.
The bill, tentatively named the Anti-Monopoly and Competition Restoration Act, is coauthored with Rep. David Cicilline, D-R.I., who chairs the antitrust subcommittee on the House Judiciary panel. Cicilline has said he will not introduce new antitrust legislation until the investigations he is leading into the growing power of big tech companies like Facebook have concluded.
Bloomberg News first reported on the anti-merger aspects of the bill.
CNBC has reviewed a draft of the bill. The legislation ultimately proposed may take a different shape. But its ideas demonstrate how dramatically Warren wishes to approach antitrust policy in the U.S. Warren, who has built her top-tier Democratic presidential campaign on a populist call for structural change in the American economy, has already pushed for breaking up big technology companies like Amazon and Facebook.
The proposed antitrust legislation goes far beyond regulating merger-and-acquisition activity and ending megamergers. It outlines a set of provisions to apply to any company with “market power.” The line Warren draws for such companies is far below the standard set for monopolistic companies, which hold 70% market share. The draft bill would instead focus on any companies with buying power, which could include corporations with market share as low as 25%. It would also focus on all companies with more than $40 billion in sales. The guidelines cover everything from the way these companies treat their competitors to how they price their products.
Spokespeople for Warren and Cicilline declined to comment.
The guidelines mimic similar ones laid out in Europe, which has taken a more aggressive approach to antitrust than the U.S. with its “abuse of dominance standard.” Critics of Europe’s approach argue there is a reason that the world’s most innovative companies, like Google, have been born in Silicon Valley and not Paris or Berlin. Its defenders argue concerns over the potential ability of companies like Amazon and Facebook to abuse their power overrides concerns of economic power.
“Over the last 3 decades, powerful corporations have amassed too much power over the United States economy, stifling competition in United States markets and harming consumers, workers, small businesses and entrepreneurs, and innovation,” the bill’s authors write.
Warren has argued that U.S. antitrust regulation doesn’t meet the needs of the 21st-century economy.