It’s no secret that Sen. Amy Klobuchar (D-Minn.) takes a “big is bad” approach to private companies. Last year, she published Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age. In it, she makes the case for going after large companies, claiming many of America’s economic ills can be assuaged by an aggressive antitrust approach. She’s since followed with a slew of bills that would help accomplish her vision for an American regulatory regime. Lately, her focus has rested on big American tech companies.
However, in Antitrust, Klobuchar discusses a far broader antitrust vision than just attacking big tech. In the last year, she has introduced the American Innovation and Choice Online (AICO) Act, which would prevent big tech companies from promoting their own products and services. She also introduced the Platform Competition and Opportunity Act (PCOA), which is meant to stop supposed anticompetitive mergers and acquisitions by big tech companies. One will notice that these business practices are not limited to big tech companies. A deeper dive into these bills suggests corruption abounds.
First, both AICO and PCOA have qualifying thresholds. PCOA stipulates a company must have a market capitalization above $600 billion for it to be subject to the regulations of the bill. AICO’s is $550 billion. It is important to note AICO’s was initially also $600 billion but was amended in what can only be described as a transparent effort to still include Meta (Facebook) in the scope of the bill due to its falling stock price. This indicates that the effort behind these two pieces of legislation is more about targeting particular companies to settle a political vendetta than solving an actual societal issue.
As of now, only six American companies exceed those benchmarks. The four relevant ones being targeted by this legislative push are Apple, Microsoft, Alphabet (Google), and Amazon – Meta’s market cap has fallen below $550 billion since the relevant amendment to AICO. Again, this approach has been tailored to go after a small set of tech companies, rather than the broad scope of monopolistic villains Klobuchar describes in her book.
Let’s say, hypothetically, this push was broadened to include all types of companies – not just tech companies – and the market capitalization benchmark were lowered just a little bit to $500 billion. That would only add one more company to the six who already meet that standard. That company would be UnitedHealth. As of the writing of this piece, their market capitalization is $500.82 billion and they have made a number of mergers and acquisitions worth billions in just the last year.
Certainly, a company like UnitedHealth would be a prime candidate for the regulations of PCOA if Klobuchar’s diagnosis of American capitalism were correct. Perhaps the reason for this oversight is the fact that UnitedHealth is headquartered in Minnetonka, Minnesota – Klobuchar’s home state. On top of that, is the fact that UnitedHealth happens to be Klobuchar’s ninth largest total campaign contributor.
The home state favoritism does not stop there. Many pundits have pointed out that market capitalization is a fairly arbitrary way to categorize a large company and have wondered aloud why revenue was not taken into consideration. As of now, only two of the top five American companies in terms of total revenue would be impacted by AICO and PCOA – Amazon and Apple. The other three are Walmart, CVS Health, and the aforementioned UnitedHealth.
This is where the convenient coincidences begin piling up. Walmart is famously headquartered in Bentonville, Arkansas, the home state of Klobuchar’s PCOA co-author, Sen. Tom Cotton (R-Ark.). CVS Health is based in Woonsocket, Rhode Island, the home state of AICO’s primary sponsor in the House, Rep. David Cicilline (D-R.I.).
CVS and Walmart both make use of their own branded products, something that would ordinarily make them a focus for a bill like AICO. The focus on tech companies helps brick-and-mortar retailers like Walmart trying to compete in an increasingly digital world. It also helps other companies like Target, who is among the highest revenue companies, but has a comparatively low market capitalization. Target is also based in Klobuchar’s home state of Minnesota.
Occam’s Razor states that the simplest answer is often the best answer. When observers wonder why massive companies like Walmart, CVS, UnitedHealth, and Target are left untouched by a massive antitrust push, the likely answer is that legislators in Washington want to shield them while going after their contemporaries.
The antitrust push embodied by bills like AICO and PCOA should be shown for what it is – a political assault on American tech companies to the benefit of other entrenched special interests. This is hardly the magnanimous grassroots effort on behalf of small businesses it purports to be. It is Washington cronyism at its most blatant.
