By Noah Vehafric
At the recent House Antitrust Subcommittee hearing, Congressman Ken Buck (R-CO) said that the proposals to change antitrust law which are under consideration by the subcommittee would not apply to the entire economy. Unfortunately, that’s just not true. At that same hearing, Commissioner of the FTC Noah Phillips stated that antitrust law is broad, and that it’s difficult to tailor it to specific industries.
At the same time, Senator Amy Klobuchar (D–MN) made waves recently from her quip that the economy has consolidation in everything from “cat food to caskets”. It’s clear that many want to use antitrust law as the catch-all problem solver.
For months, Digital Liberty along with other free-market and consumer advocacy groups have been warning that making changes to antitrust law just to throw the book at big tech will have wider consequences. And now we can begin to see this more clearly.
Last November, Digital Liberty Executive Director Katie McAuliffe published an OpEd in the Morning Consult addressing this exact issue. Fintech – the cross between the tech and finance sectors –started getting interference from the Department of Justice where a merger between Visa and a smaller startup named Plaid received a lot of scrutiny. Visa wanted to acquire Plaid because of its novel ability to centralize user’s financial information across multiple platforms securely. The DOJ challenged the merger and Visa backed down.
Just this week an article in Roll Call laid out new risks to the fintech sector from revived antitrust zeal. The Antitrust Division of the DOJ completed a consolidation of all its financial services enforcement into a single unit. This comes as global fintech mergers speed up to being almost 50% higher than last year at this time.
The leap from tech to fintech is just a stepping stone to finance. We will continue to see similar patterns in other industries. Just as E-Retail is getting more scrutiny now, we’ll start to see brick-and-mortar stores’ websites in the cross-hairs, and then maybe the stores themselves.
Remember: Antitrust law is not designed to solve unrelated social issues. There are other remedies in-play, but antitrust law should remain in a position that protects consumers and the competitive process, not individual competitors in a marketplace.
Photo Credit: Katie Moum