Crain’s Extra: Biden administration’s focus on antitrust policy drives companies to good behavior

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Peter Finch in Network | Newscom

After being briefed on inflation, the impending war in Ukraine or the latest school shooting, President Joe Biden should open a window and shout, “I’m crazy as hell and I’m not going to do this again!” You can scoff, but Peter Finch captivated the nation in Network.

Today we’re going to talk about one thing that’s really got the administration going: antitrust policy. I bet you didn’t see it coming.

For a long time, the most important constituency for companies wishing to merge was the shareholders. Objections, qualms and criticism from regulators, unions or community groups all lay far behind in the dust.

The times have changed. The Biden administration is taking its time approving corporate combinations. The reason given may be that the economy is too focused on a handful of media, food distributors, transportation and energy providers who may have excessive pricing power. As proof, corporate profit margins have remained quite high even when inflation is soaring.

So now our captains of industry come hat in hand, promising the government that they won’t abuse their position if they can just get another deal.

To gain approval for its $75 billion acquisition of Activision Blizzard, Microsoft says app developers won’t be forced to process sales through its proprietary payment system. This is in response to complaints from lawmakers who say Apple’s App Store is taking an unfairly large cut in revenue and is anti-competitive. Microsoft must convince Lina Khan, the chairwoman of the Federal Trade Commission, who fears the sale of Activision will reduce competition in games.

Closer to home, two transaction-hungry banks have made unusually specific pledges to better serve the poor and people of color.

New York Community Bancorp, which would like to buy a Michigan bank, last month pledged to provide $28 billion in loans to underserved communities. It also agreed to open at least two new branches in poor neighborhoods, provide $1 million a year in down payment assistance, at least $100 million a year in financing for developers and for-profit lenders. nonprofit, up to $5 million a year for community development and to increase grantmaking in the city by 50%.

M&T Bank, which has been awaiting federal merger approval for a year, has pledged to open a new branch in the Bronx, increase grants to community organizers and publicly commit to best practices in the fight against harassment and displacement of tenants defined by the Association for Neighborhood and Housing Development, a non-profit organization in Manhattan.

The banks have already made promises. The difference is that they commit specific amounts and say how many people will be responsible for the work.

“While ANHD and our Equitable Reinvestment Coalition appreciate NYCB and M&T for making strong commitments in these plans, we are dismayed that plans like these – and more – are not necessary for all mergers,” said ANHD executive director Barika Williams.

There is every reason to demand them now. Responsibility is good for everyone.

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