Tighter Antitrust Enforcement Could Spell Trouble for Warren Buffett’s Berkshire Hathaway

The Biden administration’s recent antitrust lawsuits against leading companies such as Visa, Mastercard, Amazon, and Apple could potentially affect their shareholders, including Warren Buffett’s Berkshire Hathaway, according to an expert’s analysis shared with Newsweek. Berkshire Hathaway, a significant investor in these companies, might see an impact on its portfolio, which heavily leans towards Apple with a 5.9 percent stake, making up 42.9 percent of its $364 billion portfolio.

Despite the analysis’ focus on Apple, Berkshire Hathaway also holds investments in Visa and Mastercard, though these represent less than 1 percent of its total assets. Amazon constitutes a modest 0.5 percent of its portfolio. The antitrust actions taken by the Biden administration aim to bolster U.S. competition authorities in addressing the dominance of a few corporations over their respective markets, a trend that has seen Apple, Amazon, Visa, and Mastercard all facing legal challenges.

In a notable development, Visa and Mastercard agreed to a $30 billion settlement with U.S. merchants over allegations of conspiring to overcharge the Square payment platform, as reported by Newsweek. This settlement, pending court approval, underscores the heightened scrutiny these companies face regarding their market practices.

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Steve H. Hanke, a Professor of Applied Economics at The Johns Hopkins University, highlighted the Biden administration’s antitrust approach as being influenced by the ‘New Brandeis’ movement. This perspective, often summarized as “big is bad,” has led to more forceful opposition to proposed mergers and to scrutinizing companies’ market behaviors more closely. Hanke expressed concerns that such regulatory efforts could dampen the success of these corporations and, by extension, affect their shareholders, including Berkshire Hathaway.

However, not all experts agree on the potential impact of these antitrust lawsuits. Yuri Khodjamirian, CFA, Chief Investment Officer at Tema ETFs, suggested to Newsweek that companies like Visa and Mastercard have historically navigated regulatory challenges successfully and that the case against Apple might not be as strong as perceived. Khodjamirian emphasized the resilience of these companies’ business models despite regulatory pressures, suggesting a less dire outcome for investors than some might fear.

Source: News Week