Proposed bill would stop Apple and other tech giants from acquiring companies

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iPhone 12 Pro parts cost shockingly little
Bill would stop tech giants splashing the cash.
Photo: Cult of Mac

Sen. Josh Hawley introduced a bill Monday that would ban mergers and acquisitions by companies with market caps in excess of $100 billion. If passed, the bill could have a massive impact on technology companies, including Apple.

Apple, for the record, currently has a market cap of $2.2 trillion. Other tech giants worth upward of $100 billion include Microsoft, Amazon, Alphabet, Facebook, Uber, Airbnb and Netflix.

The idea behind Hawley’s Trust-Busting for the Twenty-First Century Act is that stopping large companies from carrying out acquisitions would even the playing field. For example, such a law would have stopped Facebook from buying rivals. (Last December, federal regulators and state prosecutors sued Facebook for allegedly stifling competition by acquiring rivals such as Instagram and WhatsApp.)

Apple pursues a very different strategy when it comes to buying companies. It doesn’t buy giants (with the occasional exception of something like Beats). Most of the companies it buys are much smaller. Apple typically shuts them down and bakes their technology into its own products.

However, it buys plenty of these smaller companies — as a cursory search for “Apple acquires” on Cult of Mac proves. A report published in February shows that Apple buys a company every three to four weeks. Over the past five years, it snapped up more artificial intelligence companies than any other tech giant. If this new bill passes, Apple would be unable to do this.

There’s still a long way to go before the bill introduced by Hawley — a Republican lawmaker highly critical of Big Tech — could be signed into law. However, it’s definitely the kind of proposal that should get tech giants sweating.

Source: Reuters