How Congress plays favorites
The bipartisan congressional war against its current favorite bogeyman – Big Tech – has told us a lot about the politicians waging it.
While some are simply out of their intellectual depth, others are showing they would rather play an old fashioned game of favorites. Consider a self-styled anti-monopoly bill from Sens. Amy Klobuchar and Tom Cotton. It’s a masterpiece of political favoritism masquerading as consumer protection:
The legislation aims to prevent tech companies from buying up rivals, and is clearly concerned about Facebook’s previous business practices. The social media site’s acquisitions of WhatsApp and Instagram, which were approved by the Obama-era Federal Trade Commission with little fanfare, are now widely reviled by anti-tech crusaders on both the left and right. Under current law, the onus is on the government to prove that a merger will harm consumers; the Cotton/Klobuchar proposal would shift the burden of proof to the company making the acquisition.
And here’s the real catch:
…there’s one odiously crooked provision of the Platform Competition and Opportunity Act that deserves special mention. The law would only apply to companies of a certain size—i.e., firms that have a “net annual sales of $600,000,000,000 in the prior calendar year or with a market capitalization of greater than $600,000,000,000.” Facebook and Amazon, for instance, both have market caps well over $600 billion, so the law would apply to them.
Note, however, the bill stipulates that it only covers firms that are over the $600 billion line “as of the date of enactment.” In other words, if a company has a market cap under $600 billion on the day the bill becomes law, then that company is permanently exempt—even if it later crosses the threshold.
Two companies that are currently under the $600 billion line and thus exempt from the bill are mega-retailers Target and Walmart. These companies are both worth hundreds of billions of dollars, and their e-commerce platforms are growing at a faster rate than Amazon’s. But under the Klobuchar/Cotton law, it wouldn’t matter if Target and Walmart overtake Amazon—they would be immune from this new antitrust action, as long as they are small enough on the day the bill is signed.
Why those two companies:
…Target is headquartered in Minneapolis, Minnesota. Walmart is headquartered in Bentonville, Arkansas. Isn’t that interesting? It’s probably just a coincidence that the $600-billion-at-date-of-enactment provision would shield the two most important companies in Klobuchar and Cotton’s home states.
It’s the chef’s kiss of congressional favoritism — done in full view, with a straight face, and not a shred of guilt.