Could the Tesla-SpaceX merger that Elon Musk floated this week pose antitrust problems?
One former Justice Department official told Semafor that the risks are real.
Antitrust regulators view such “vertical” mergers as pro-competition, the official said — because they can make supply chains more efficient — but could try to stop the merger if Tesla-SpaceX gets deemed a possible “vertical foreclosure.”
A foreclosure situation arises when a firm uses its position to restrict competitors operating at another level of its supply chain, the official explained; in this case, other driverless or electric car companies could stand to lose out if, in the future, only Tesla cars got access to SpaceX technology like Starlink.
Of course, that depends on the terms of the still-hypothetical deal. It also depends on how much Trump-aligned US antitrust enforcers want to clash with Musk, a major Republican donor.
Even so, should Democrats take back the House next month, Musk would face congressional investigations — and lawmakers would closely scrutinize any attempts to merge his companies.
“If Elon Musk moves forward with the merger of Tesla and SpaceX, the deal would carry real risks that antitrust enforcers across the world would scrutinize,” Sen. Cory Booker, D-N.J., told Reuters. “When one person controls the infrastructure that governments and militaries depend on, his business decisions become national security decisions, too.”
Reuters reported that Tesla’s work in China could also complicate things, as Starlink technology is used in foreign conflicts and the company has a relationship with the Pentagon.
Any Tesla-SpaceX merger could also get examined by global antitrust enforcers for its impacts on overseas auto, AI, and aerospace industries.