Updated: Dec 12, 2022
We don’t know how we missed this Senator Rand Paul speech when it he made it during his successful effort to block Senate consideration of H.R. 3843, the so-called “Merger Filing Fee Modernization Act,” which attempts to impose new fees on mergers.
Fortunately, as subscribers to Steve Moore’s must-read Committee to Unleash Prosperity Hotline, we got an after the fact heads-up and can pass it along to CHQ readers. You can subscribe here, and it is free, by the way.
While expanding antitrust enforcement is a longtime project of the Left, many conservatives were inclined to support the “Merger Filing Fee Modernization Act” because it purported to address some legitimate concerns about how antitrust litigation is conducted.
As Jake Denton of the Heritage Foundation explained, “The Merger Filing Fee Modernization Act is a necessary first step to enforce the law, contend with our adversaries in the national security arena, and delineate more power to the states. Conservatives should be first in line to support it.”
Sticking it to The Man – especially sticking it to the Big Tech Man – is an appealing prospect to many conservatives.
The problem is the tool proposed to “stick it to The Man” in H.R. 3843 is more Big Government.
Which is where Senator Paul zeroed in. "Big is always bad except, of course, when it comes to the size and scope of government," Paul said sarcastically.
"The same people who supposedly fear the concentration of power in the marketplace celebrate the concentration of power in the state – a state that inserts itself into and nullifies private contracts, breaks up companies it deems too large, and inflicts punishment on those who succeed in the competition or consumers."
Here’s a complete video of Senator Paul’s remarks and it’s well worth watching.
(If your device doesn’t play well with Java script, here’s a link to the Rumble page.)
And, as Senator Paul observed in an op-ed:
…antitrust seeks to cap the amount of success any business can enjoy and the benefits reaped by customers.
As the economist Yale Brozen wrote, antitrust law "seems to say that firms should compete but should not win. Firms should be efficient enough to survive but … should not share the fruits of that greater efficiency with their customers."
And that is the fatal defect of antitrust policy. Antitrust fails to accept the lessons of economic history: that voluntary exchange is a win-win proposition and that consumers are incredibly powerful in a free-enterprise system.
A company that continuously rewards its customers with superior products and innovations will, in turn, be rewarded with a greater market share than its competitors.
But no company can achieve a strong position in the market and rest on its laurels. Consumers are too demanding, and competitors will arise to steal customers away from any firm that ceases to treat its clients well.
Unlike players in the marketplace, who must take note of consumer trends to survive, antitrust enforcers often fail to see what is in front of their faces.
Just take the issue of video services. In 2005, when Netflix was already several years old and growing in popularity, the FTC busied itself by blocking a merger between Blockbuster and Hollywood Video, two companies that no longer exist.
And Netflix continued to grow. It grew so successfully that only a few years ago some thought Netflix was becoming a monopoly.
No such fear exists today as Netflix competes with Hulu, Peacock, Amazon Prime Video, Disney Plus, HBO Max, Apple TV, Paramount Plus and others.
We didn’t need government to break up Netflix. We didn’t need government to intervene to ensure competition and innovation. All we needed to do was to let the market work.
And we should point out – Big Government does these things only on a selective basis. If you are a favored Big Business, like Google or Facebook, you can usually get away with buying or merging with competitors or potentially competing technologies, but if you are a company the Left loves to hate you’re going to get intense scrutiny.
Senator Paul concluded his objections to the “Merger Filing Fee Modernization Act” by saying:
There is no lack of bills designed to empower government control of the marketplace.
Take just one bill called the Competition and Antitrust Law Enforcement Reform Act, which would presume that any merger of a certain size violates the law and shifts the burden of proof to the merging parties to demonstrate that the merger is legal.
According to Robert Bork Jr., the president of the Antitrust Education Project, that bill "would enact so many potential ways to prosecute, abuse, and torment companies that government would, in essence, become the real board of directors of every major company in America."
That is what is coming. The antitrust legislation we in the Senate considered this week is a mere precursor to designating the Department of Justice and Federal Trade Commission as the central planners of the American economy.
It seeks to take the power out of the hands of consumers and hand it to antitrust bureaucrats…
We like sticking it to The Big Business Man as much as anyone but using Big Government as the tool to do so is extremely ill advised. As we have seen time and again with the Big Government Leviathan, when business urges that government be given additional teeth to go after a competitor, it is not the best product, but the best lobbyist who wins, and consumers and market innovation become the ultimate losers.
Senator Rand Paul
Merger Filing Fee Modernization Act
Fees on Mergers
Free Enterprise System
Antitrust Education Project
Department of Justice
Federal Trade Commission