The U.S. Needs Conglomerate Merger Legislation
Originally published: Take Care Blog, January 1, 2019
republished on CLS Blue Sky Blog
5 Pages Posted: 4 Jan 2019 Last revised: 26 Jan 2019
Date Written: January 1, 2019
Today the largest U.S. company in terms of market capitalization, Apple, which recently hit the $1 trillion mark, could lawfully merge with the second largest company, Amazon (which has ~$800 billion in market capitalization) and also with other incredibly large firms (e.g., Exxon/Mobil and JP MorganChase), so long as they spun off any significant overlaps. In fact, under current antitrust law, it would theoretically be permissible for a series of mergers to leave the U.S. with at most ten corporations, each owning 10 percent of every industry.
Sandeep Vaheesan and I are drafting and proposing legislation that would block these extremely large mergers. The bill we’re constructing would block all mergers by companies larger than clearly specified—but quite large—limits. For example, any firm with more than $10 billion in assets could be prohibited from merging with any other company also exceeding this threshold. We believe that legislation requiring this limitation would have a number of benefits, with virtually no risk of downside consequences for society.
Keywords: mergers, antitrust, conglomerate mergers, antitrust reform, large mergers, antitrust and politics, antitrust and political power, antitrust and size
Suggested Citation: Suggested Citation