US Senate Bill Proposes Ban on Mergers Over $5B, Sets up Regulator Tools

Two Democratic lawmakers rolled out a bill Wednesday (March 16) which would add more regulations on mergers, a report said, including a prohibition on those valued at more than $5 billion.

The act is called the Prohibiting Anticompetitive Mergers Act. Sponsored by Sen. Elizabeth Warren, D-Mass., and Rep. Mondaire Jones, D-N.Y., it would prevent mergers and acquisitions that would end up increasing market share among sellers and buyers above certain thresholds. And it would create more tools for regulators to unwind mergers.

The Ars Technica report noted that the bill might be most notable because it attempts to limit companies’ dominance as an employer, through preventing any one firm from controlling over 25% of a labor market.

The report said that the bill also addresses antitrust concerns like the concentration of sellers, barring mergers that would give one company control of over 33% of the market.

The report said the use of antitrust law to help balance the market has been done before, though it hasn’t been used widely in the U.S. But there’s been more focus lately on how market concentration harms workers.

In the labor market, companies are considered buyers, and if a company is dominant on the buy-side, it’s called a monopsony, which can distort markets by throwing weight around with sellers.

Monopsonies can also affect wages, benefits and employment among workers.

Read more: DOJ, FTC Summit May Shed Light on Merger Guidelines Reform

The Department of Justice (DOJ) has announced that its Antitrust Division, along with the Federal Trade Commission (FTC), will cohost a conference on April 4, which will go over modernizing merger guidelines.

The event comes after the FTC has taken back its Vertical Merger Guidelines in September, issued together with the DOJ to offer transparency about the approach to vertical merger analysis.

That move has been consistent with the way the Biden administration has been working on revising merger control.

The DOJ said it’s  “conducting a careful review of … the Vertical Merger Guidelines to ensure they are appropriately skeptical of harmful mergers … The department’s review has already identified several aspects of the guidelines that deserve close scrutiny, and we will work closely with the FTC to update them as appropriate.”