Amazon's purchase of MGM for more than $8 billion has U.S. lawmakers, who are pushing to reform antitrust laws, renewing their emphasis on mergers.
"Amazon's proposed purchase of MGM reinforces what we already know — they are laser-focused on expanding and entrenching their monopoly power," Democratic Rep. David Cicilline, who led a monthslong probe of big tech companies that heard testimony from Jeff Bezos and other CEOs, said on Twitter. "That's bad for workers, consumers, and small businesses."
As head of a subcommittee on competition law, Cicilline is one of the primary lawmakers looking to change antitrust as a way to rein in the power of Big Tech and other concentrated sectors, but the ranks of those interested in such changes have grown on both sides of the aisle.
"It's critical that mergers and acquisitions involving monopoly companies experiencing tremendous and exponential growth are met with a greater level of scrutiny," said the top Republican on Cicilline's panel, Rep. Ken Buck, on Twitter alongside the news of the MGM deal.
Cicilline and Buck have repeatedly said they're working toward agreement on proposed changes to antitrust law, at a time when Google and Apple are facing lawsuits over allegedly abusing their dominance of certain markets. Yet the bread and butter of competition law has always been on spotting and stopping anticompetitive mergers and acquisitions, and Cicilline, Buck and other members of Congress have said that making mergers more difficult for the biggest tech firms is an area where it's important — and possible — to find a bipartisan plan quickly. (Anticompetitive mergers are also the focus of the government cases against Facebook.)
Under current law, Amazon's deal may face little scrutiny because of the fierce competition for both video streaming and production, but some lawmakers increasingly see much M&A by the biggest corporate players as suspect on its own, in part because tech giants grew to their current size through deals that enforcers routinely approved.
In February, Democratic Sen. Amy Klobuchar, who heads the Senate counterpart to Cicilline's committee, proposed a bill that would forbid mergers that lessen competition "more than a de minimus amount," rather than the current standard of substantially lessening competition. She has also proposed a bill, which received bipartisan support in committee earlier in May, that would raise the fees that companies pay when they disclose the biggest pending deals. That money would go toward funding increased enforcement.
"The Department of Justice must conduct a thorough investigation to ensure that this deal won't risk harming competition," she said in a statement in response to the proposed tie-up.
The purchase attracted the ire of liberal groups that demand more enforcement of antitrust laws against tech, but Republican Sen. Josh Hawley, who has criticized tech in response to conservative allegations that the companies censor rightwing voices and content, also weighed in on the deal. He tweeted Wednesday that, given Amazon's power in ecommerce, shipping and cloud, the company "shouldn't be permitted to buy anything else." He has proposed simply banning mergers by companies worth more than $100 billion.
Although there's a growing group of tech-skeptical Republicans who have backed calls for aggressive antitrust law and enforcement, legal changes would likely still require agreement from more-traditional GOP lawmakers who think competition law should stay out of the way of American business and worry that new merger rules could have far-reaching effects beyond tech.
Yet as they debate, Amazon isn't only facing scrutiny of its deals: The announcement of its hopes to buy MGM also came a day after the District of Columbia sued the company. While Attorney General Karl Racine's lawsuit doesn't focus on acquisitions, it alleges that Amazon's price policies for independent merchants who sell through its site stop other ecommerce platforms from gaining a foothold and force consumers to pay for the fees Amazon levies.