China Blocks Tech Acquisitions To Weaken America. The U.S. Shouldn’t Follow Suit.
Earlier this week, the People’s Republic of China blocked Meta’s acquisition of Manus, an AI startup developing an advanced AI agent capable of completing complex tasks. relocated From China to business- and investment-friendly Singapore last summer, apparently with the approval of Chinese regulators.
Meta announced It acquired the fast-growing artificial intelligence company for $2 billion last December. At the time, Meta celebrated the deal as bringing “one of the leading autonomous general-purpose agents” to billions of people and millions of businesses. In short, the synergy between Manus’ technology and Meta’s scale made for a promising acquisition.
The Chinese government was less enthusiastic.
Ministry of Commerce in January announced A regulatory investigation into the deal was launched, noting the agreement’s suspiciously broad mandate that “businesses engaged in overseas investment, technology exports, cross-border data transfers, cross-border mergers and acquisitions must comply with Chinese laws and regulations.” On Monday, the National Development and Reform Commission, Working Mechanism for Foreign Investment Security Review, declared He said the agreement should be cancelled.
Of course, this is just the latest example of China advancing its goal of global techno-economic hegemony by blocking acquisitions by major American technology companies. In 2023, China’s main national antitrust regulator, the State Administration of Market Regulation, forced Intel will cancel its $5.4 billion acquisition of Israeli chipmaker Tower Semiconductor, which has an office in Shanghai, by delaying the merger approval for 18 months.
While it’s easy to become frustrated with the Chinese government’s use of merger and acquisition controls to limit the competitive advantage of American tech firms, many policymakers in the West have ensured China’s success by weaponizing antitrust and competition laws to eliminate pro-competitive deals by Big Tech firms.
The collapse of iRobot is an example of this. In August 2022, Amazon offered to acquire the American robotics company, even though it is the manufacturer of the innovative autonomous Roomba vacuum cleaner. Rapidly losing market share Stock value against Chinese state-backed rivals halved From the 2021 peak.
Aside from iRobot’s financial insecurity and the lack of a coherent theory of anticompetitive harm, the Federal Trade Commission under then-Chairman Lina Khan had long pursued this issue. hatred It opened an investigation against Amazon in September 2022. Anticipating lawsuits from federal regulators and facing scrutiny from the European Commission, Amazon withdrew its $1.4 billion offer in January 2024.
