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What Is CALERA Law 2021 -Everything You Need To Know About CALERA Antirust Law

Regulators Aim To Implement Stricter Antitrust Rules

Lawmakers introduce CALERA Law to enforce firmer antitrust rules for leading tech companies.

American technology companies, especially the big ones, have continuously increased their influence in today’s modern world. 

Given this, many individuals worry about the big impact it would make when big tech firms merge in monopolizing the market.

To address this, different lawmakers proposed to create a new law that would impose stricter antitrust regulations for major tech companies.

The CALERA Law 2021

The CALERA law, also known as the Competition and Antitrust Law Enforcement Reform Act of 2021, seeks to introduce regulations that would prevent big companies from dominating the market and undermining their competitors.

In 2020, an antitrust lawsuit was filed against Facebook and Google, which prompted the creation of the CALERA law. 

Multiple lawmakers were against the two giant tech companies’ merger and are requesting their separation.

The law aims to empower organizations to participate in a fairer competition and provide more innovative and better services to their consumers.

Equal Competitive Conditions

The growing influence of leading tech companies gives them the power to dominate and control the market. 

Some examples where tech companies utilized their advantage to sway the market were:

1. Apple has removed Fortnite from the Apple Store. This was a result of Fortnite’s move to create its own in-app purchasing system. The game’s price soon lowered after it was removed from the Apple Store.

2. Amazon’s platform allows multiple retailers to sell their products online. However, the company utilizes the analytics gathered from their services to determine the products that will yield high profits. The company also sells these products on their website, which competes with their retailers.

3. Facebook allegedly bought its competitor company, Instagram, to control the increasing market for mobile consumers.

4. Google earns from ads and sales that they post through their services. The company has also increased its earnings from mobile consumers by offering to pay Apple to make Google Chrome the default search engine for iPhones.

CALERA aims to gain control and implement regulations that will allow for a more level-playing field for big and small tech companies.

Stricter Antitrust Regulations

Undergoing mergers have allowed various large companies to combine their power and gain more edge against their competitors.

Lawmakers are revisiting the existing antitrust law to confirm that measures are in place that will prevent merging companies from oppressing their competition and obtaining an overwhelming business monopoly.

The CALDERA law proposes that the government should strictly check deals that meet any of the following conditions:

  • The total worth of one of the companies involved in the merger is more than $100 million.
  • The merger costs over $5 billion.
  • The merger will give the companies more than 50 percent dominance of the market.

If the merging companies were identified to satisfy the criteria, they would need to provide additional information and justify that the merger will not result in a monopoly.

Additional Budget For Regulators

In the past, lawmakers have found it hard to fight tech companies due to budget constrictions. 

Because of this, federal regulators have requested an additional budget that will allow them to fund efforts that manage tech companies.

In particular, the allocation for the Department of Justice was increased by $300 million, while an additional $300 million was also given to the Federal Trade Commission.

The increased budget will give the governing bodies more power to increase the competencies that will enable them to execute and review mergers more efficiently.

Editor’s Note on What Is CALERA Law 2021:

This article is published to inform you of the latest CALERA law introduced in 2021 by lawmakers to execute stricter antitrust rules.

What are your thoughts on this piece? Do you have any concerns with mergers by big tech companies? 

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