Crackdown on Big Tech May Stall, but Wall Street Regulation Will Heat Up
Author: Greg Valliere
January 21, 2022
WITH CONGRESS DIVIDED, AS USUAL, supporters of tougher antitrust regulation of Big Tech have low expectations that they can get a bill passed this year. The big action won’t come from Congress — it will come from the federal regulatory agencies, which will move aggressively, especially against Wall Street.
THE SENATE JUDICIARY COMMITTEE passed a controversial bill yesterday to block the biggest technology platforms from giving preferential treatment to their own products, a proposal that has generated strong opposition from California’s congressional delegation, which receives generous campaign contributions from the industry.
THE MEASURE WOULD BLOCK dominant online companies (defined by user base and revenue) from giving preference to their own products. This is aimed largely at Amazon, Apple, Meta and Google.
THE BILL’S PROSPECTS ON THE SENATE FLOOR later this year are fair at best, since other legislation will take precedence — as Democrats attempt to revive portions of the Build Back Better bill. Several provisions may move, including funding for pre-kindergarten education, Obamacare expansion, drug price controls and environmental programs.
CRITICS OF BIG TECH REFORM argue that it would make foreign companies more competitive, and would hurt innovation, privacy and data security. And conservatives argue that the bill doesn’t crack down against what they view as censorship of their positions.
BIG TECH EXECUTIVES say they would welcome legislation to set clear standards, but in truth they would be happy with a typical Congressional stalemate that drags on and on — maintaining the status quo.
* * * * *
THE BIGGEST REGULATORY STORY IN WASHINGTON will come from the Securities and Exchange Commission, where activist Chairman Gary Gensler is preparing a crackdown on Wall Street. In a speech earlier this week, Gensler said his proposals will “increase efficiency” in the capital markets — in part by reducing the amount of money that companies pay on fees.
THE WALL STREET JOURNAL REPORTS that Gensler will make three proposals in the coming week: a rule to enhance disclosure by private-equity funds; reforms in the U.S. government debt markets; and increasing transparency on executive compensation.
THE SEC IS CONSIDERING other rules, many focused on disclosure, and like virtually every regulatory agency in the Biden Administration, there will be mandates to force companies to address climate change.
GENSLER ALSO WANTS TO bring cryptocurrency companies under stringent SEC control, citing what he believes is the public’s vulnerability to speculation.
GENSLER IS THE MOST AGGRESSIVE of the Biden regulators, although antitrust officials also will be active; they’re carefully scrutinizing the Microsoft-Activision deal. All of the regulators will need to move quickly because a likely Republican takeover of the House in November would make it more difficult win funding to enforce new regulations.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.