Senator Amy Klobuchar (D-Minn.) insists she has no plans to blow up big tech.
But now that she's the chair of the Senate Judiciary subcommittee tasked with overseeing the antitrust wings of the Federal Trade Commission and Department of Justice, some industry observers expect her to try. Bolstering that view is the fact that the antitrust reform package Klobuchar unveiled in February would be the most dramatic overhaul of the laws preventing monopolies in more than a century. Known as the Competition and Antitrust Law Enforcement Reform Act (Calera), her bill is aimed at making it harder for companies to pursue certain mergers and shifting more resources to antitrust regulators.
"I'm not talking about destroying these companies. Far from it. I'm simply talking about allowing for more competition," Klobuchar said on Thursday at the 2021 Inc. Vision Summit.
The senator referenced the U.S. government's landmark 1974 antitrust case against AT&T, which cleared the landscape for more companies to compete in the telecom industry.
"AT&T divested some of its assets. You could do the same thing here, and still have a successful Google, still have a successful Facebook," Klobuchar said. "You could also put in rules that would be helpful to some of the entrepreneurs who rely on them."
At the event Thursday, Klobuchar spoke further about the history of government regulators fighting monopolies and her plans to help small businesses and entrepreneurs as the U.S. heads toward a post-pandemic economic recovery. Here are a few major takeaways from the discussion.
Antitrust regulators need more resources
Klobuchar's bill would increase the funding and head count in the antitrust divisions of the FTC and DOJ. In theory, this would give antitrust regulators greater ability to pursue monopolies and battle big tech in the courtroom.
"Let's up the resources for the agencies that we're charging with being as sophisticated as the companies they're regulating," Klobuchar said. "These are the biggest companies the world has ever known, and these guys are trying to do this with Band-Aids and duct tape." She further noted that the agencies' antitrust divisions have fewer employees than they had when Ronald Reagan was president in the 1980s.
Large companies shouldn't be able to buy their competitors so easily
Klobuchar touted how her bill would rein in big companies from avoiding competition through acquisitions. "The standard should be ... that if you have over 50 percent market share and you go buy a nascent competitor in your same line of business, then you've got to show it's not going to be anticompetitive," she said. For megamergers of more than $5 billion, she added, the bill would require the acquiring company to show that the deal doesn't harm competition, rather than putting the burden on the government to prove otherwise.
The antitrust effort isn't just about the tech industry
Klobuchar's antitrust agenda spans far beyond big tech. As chair of the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights, Klobuchar plans to hold a series of hearings this year tackling a range of antitrust issues. "This really spans a whole number of industries where people feel left out, and that's why we're going to be doing hearings not just on tech, but also on ag, on health care, online travel, and looking at some of the App Store issues. So there's a lot ahead here," she said.
Tech investment needs to broaden geographically
Raising capital typically has proved difficult for startups in the middle of the country. "On the front of entrepreneurship, I would like to look at government investment [to help] go beyond the three major hubs of Silicon Valley, New York City, and Boston," Klobuchar said. She mentioned a bill that she introduced earlier this year, called the New Business Preservation Act, which would have the federal government match any VC investments in businesses that aren't headquartered in traditional tech hotbeds.