Senator Josh Hawley introduced a bill Monday aimed at addressing antitrust concerns, but it may do more harm than good.
Antitrust has become a major concern for politicians on both sides of the aisle. Google and Facebook are both facing antitrust lawsuits, and officials are looking at various ways of addressing the overarching concerns about the tech industry in general.
Senator Hawley’s bill would ban companies with a market cap over $100 billion from buying any startups. As Business Insider columnist Jason Aten writes, however, such a move would harm startups far more than it would hurt Big Tech.
Acquisition is one of the main goals of many startup founders, providing an exit strategy and payday for successful founders and investors. For better or worse, large companies are an important part of that strategy. If they are blocked from acquiring companies, it could completely disrupt the startup scene.
Another major downside is the disparity between large and small companies that may be over $100 billion. Aten uses the example of Shopify, a company large enough to fall under Hawley’s bill. Shopify would be prohibited from buying an up-and-coming app, service or platform that could help it better compete with much larger rivals, such as Amazon or Walmart. Such an outcome would only hurt Shopify, while protecting the larger company even more.
Aten’s take on the situation well-illustrates the challenges of addressing antitrust issues without creating even more problems.