Council Testifies on Harm of Over-Reaching Federal Anti-Trust Legislation
The Bay Area’s world-leading innovation economy has flourished in large part because of a free-market system that encourages companies, investors and workers to compete, take risks, try new and untested strategies and push the envelope of what is possible. That was the over-arching message Bay Area Council Economic Institute Senior Director Sean Randolph delivered in testimony this week (May 12) before the Federal Trade Commission and FTC Chair Linda Kahn as they convened a national listening tour on “The Effects of Mergers and Acquisitions on Technology”.
The FTC and Department of Justice are considering the broad-based regulation of technology companies through antitrust. Dr. Randolph’s remarks focused on the potential harm to investment and innovation of proposals that would prevent large platform companies from acquiring startups. Sixty percent of startup exits take place through acquisitions, rewarding founders and investors and helping venture firms to reinvest in new companies. Since many founders have acquisition as an explicit goal, foreclosing acquisitions by large companies would potentially harm not only platform companies but smaller companies that regulators say they are seeking to protect.
The Council’s science affiliate, the Bay Area Science and Innovation Consortium (BASIC), has written members of key committees in Congress opposing legislation proposed in the Senate (S.3179) that would apply antitrust enforcement to bar acquisitions by platform companies.
