Failed M&A promises threaten to bring more government regulation

More government regulation will slow merger activity. That will lead to inefficiency and higher costs.

Elon Musk’s proposed buyout of Twitter has thrust merger and acquisition activity, particularly with regards to the tech sector, into the spotlight.

A critical component of any dynamic free marketplace, 2021 was a banner year for mergers and acquisitions, reaching the highest levels since such data has been kept according to some estimates. But since President Biden took office, such activity has been receiving increasing scrutiny. Federal Trade Commission (FTC) chair Lina Khan, for example, has repeatedly expressed her skepticism to industry consolidation in general. Some recent mergers that have failed to live up to expectations threaten to sway the sentiment of the American public in favor of such blanket bans.

The wild claims of fraud and gross misrepresentation of facts, as well as explosive whistleblower testimony that are enveloping the current Twitter saga and ongoing lawsuit, have all been highlighted in the breathless media coverage that has pulled back the curtain on what at times can unfortunately be a messy process. But this is not the only major merger and acquisition in the tech world that currently finds itself enveloped in controversy.