US Federal Trade Commission chief Lina Khan has stressed the need to consider mergers from a wider context to assess their impact on small business, workers and consumers, rather than just short-term prices.
In a video address to the Australian Law Council, known as the Bannerman Lecture, Khan also backed the ACCC’s push for more so-called “ex ante controls”, which occur before an event, and more consideration on industry structure avoiding too much focus on market definition issues.
The annual lecture was named after the first head of the Trade Practices Commission, the late Ron Bannerman.
The 32-year-old FTC boss is part of a new wave of antitrust regulators in the US, which is seeking Congressional backing for a new merger regime.
It also includes former News Corp lawyer Jonathan Kanter as head of the antitrust division in the Justice Department, and Tim Wu as a White House adviser.
One focus is on digital platforms like Amazon, Google, Apple and Facebook, with the emphasis on data collection and what it means for market power.
Khan made it clear the US would be more aggressive in its fight, saying there were big costs in under enforcement.
The review would look at existing controls and what is needed for the fight ahead, she said.
The US changes are mirrored in other jurisdictions, including the UK, Germany, South Korea and even China, and the clear message is antitrust law globally stands at a crossroad.
“We need to look at market concentration and the impact on innovation, privacy, small business and labour markets,” said Khan.
Khan has previously argued: “As consumers, as users, we love these tech companies. But as citizens, as workers, and as entrepreneurs, we recognise that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance.”
In answer to questions after her lecture on Thursday, Khan said the focus would be on so-called concentration creep and roll-ups where big companies buy lots of small companies, which on their own wouldn’t breach thresholds, but in combination pose threats to competition.
Khan said she will be honing in on risks of increased data acquisition, the impact on the labour market, small business and others of roll-ups, and sources of harm from mergers.
“New business models asked different questions,” she said. “Private equity tended to be short-term owners, so you need to consider the long-term impact”
“Increases in market power from increased market concentration is more than just theory,” she added.
The Australian Competition and Consumer Commission (ACCC) is also seeking changes to existing merger rules, including compulsory pre-notification of deals, but Khan stressed there is a need to look around these rules, including at mergers already completed to consider their impact.
The FTC was established with a view to considering 150 mergers a year but Khan said it now considers that many mergers in a fortnight.
ACCC chair Rod Sims has cautioned against concerns about small business losing the chance to sell if big businesses are not allowed to buy smaller firms, saying “business was not so easily chilled and the cost of under enforcement was very costly”.
The outgoing Australian regulator will address the National Press Club on February 23 when he will outline what he sees as “the unfinished business”, or the challenges ahead.
John Durie has been a business reporter for 40 years, starting his career in the Canberra Press Gallery in 1980. John worked for 13 years as Chanticleer Columnist for the AFR, four years as business columnist for the New York Post, and also worked in Paris.
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