M&A

by | Apr 14, 2023 | Business, Regulation | 0 comments

Jessica Melugin of the Competitive Enterprise Institute is an alum of Claremont McKenna College:

In a new Competitive Enterprise Institute (CEI) study, technology policy expert Jessica Melugin writes that concern about “killer acquisitions” – a market leader purchasing a would-be competitor only to shut down the threatening product – and “kill zones” – killer acquisitions harming competition at-large by deterring investment in that same product area – have prompted calls for increased regulatory scrutiny of merger and acquisition activities in the tech sector.

Melugin notes in the report, M&As Are A-Okay: How Mergers and Acquisitions Help Entrepreneurs and Drive Innovation, that U.S. Senator Elizabeth Warren (D-Mass.) introduced legislation to prohibit mergers above a certain size, while the Federal Trade Commission (FTC) under Chair Lina Khan is rewriting rules for mergers with the aim of deterring the practice.

 

But the economic evidence does not support new regulations to prevent or curtail mergers and acquisitions. Rather, that evidence aligns with the positive experience of tech entrepreneurs and investors in the marketplace.

 

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