U.S. Senator, Amy Klobuchar (D-MN), now the lead Democrat on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced sweeping new legislation late last week “to reinvigorate America’s antitrust laws and restore competition to American markets,” a statement from her office said.
The Competition and Antitrust Law Enforcement Reform Act will give federal enforcers increased ammunition to undertake the task of enforcing antimonopoly laws and will strengthen prohibitions on anticompetitive conduct and mergers and make additional reforms to improve enforcement.
While the legislation is broad based and applies across American business sectors of all types, experts tip that it will put Big Tech under the gun among other sectors given the rapid business expansion of social media, search giants, and vast online retailers.
“Competition and effective antitrust enforcement are critical to protecting workers and consumers, spurring innovation, and promoting economic equity. While the United States once had some of the most effective antitrust laws in the world, our economy today faces a massive competition problem. We can no longer sweep this issue under the rug and hope our existing laws are adequate,” said Klobuchar.
“The Competition and Antitrust Law Enforcement Reform Act is the first step to overhauling and modernizing our laws so we can effectively promote competition and protect American consumers.”
Klobuchar noted in earlier media comments before taking committee leadership that the thrust of any antitrust review is not only looking at “mergers that would be “too big to fail, but those that would be too big to fix.”
This bill is co-sponsored by Judiciary Subcommittee on Antitrust and Commerce Committee members, including fellow Senators Richard Blumenthal (D-CT), Cory Booker (D-NJ), Ed Markey (D-MA), and Brian Schatz (D-HI). Various members from across the aisle have also voiced support as well that not signed as cosponsors as of yet.
Many industries are consolidating as large mergers and acquisitions increase and big companies buy out upstart rivals before they can become a competitive threat. Harmful exclusionary practices by dominant companies – such as refusals to deal with rivals, restrictive contracting, and predatory pricing – squelch competition, according to Klobuchar’s office.
U.S. antitrust law enforcement against powerful firms has lagged efforts in other developed countries, particularly when it comes to enforcement against the dominant digital platforms and other large corporations. To remedy these longstanding issues, the Competition and Antitrust Law Enforcement Reform Act will:
Increase Enforcement Resources
For years, enforcement budgets at the Justice Department’s Antitrust Division and Federal Trade Commission failed to keep pace with the growth of the economy, the steady increase in merger filings, and increasing demands on the agency’s resources.
To enable the agencies to fulfill their missions and protect competition by bringing enforcement actions against the richest, most sophisticated companies in the world, this bill would authorize increases to each agency’s annual budget.
Strengthen Prohibitions Against Anticompetitive Mergers
The bill would restore the original intent of Section 7 of the Clayton Act, which was designed to stop anticompetitive mergers in order to address competitive problems in their “incipiency” before they “ripened and caused harm.”
Klobuchar’s office noted that as the law stands today based on recent court decisions, enforcers can block only the most egregious acquisitions, which has allowed many harmful mergers to escape scrutiny. To remedy this, the legislation will:
Update the legal standard for permissible mergers
The bill amends the Clayton Act to forbid mergers that “create an appreciable risk of materially lessening competition” rather than mergers that “substantially lessen competition,” where “materially” is defined as “more than a de minimus amount.”
A number of anti-monopoly advocates and organizations hailed the legislation for address growing potential problems of market controls by just a few companies, such as Amazon’s disruption of “main streets’ small businesses.
“This bill will turbocharge antitrust enforcement,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge, adding, “Much-needed updates to the Clayton Act’s merger review and exclusionary conduct provisions, along with a new office at the Federal Trade Commission and more funds for antitrust enforcers, will help level the playing field for enforcers to better protect consumers from anticompetitive abuses. I’m looking forward to continuing to work with Senator Klobuchar on this and other competition policy proposals.”
While George Slover, Senior Policy Council at Consumer Reports noted, “Consumer Reports appreciates Senator Klobuchar’s steady leadership in working to strengthen our antitrust laws to equip them to protect a competitive marketplace and the benefits that consumers, small businesses, and workers receive from it.”
Slover added, “This legislation gives our antitrust laws an important re-set. It ensures that harmful merger trends and exclusionary conduct can be stopped before it is too late and the harm is locked in”
Analysts have noted that the Minnesota Senator’s legislation nevertheless, does not extend to the point of recommendations made last year by the House antitrust panel, which was helmed, by Representative David Cicilline, (D-RI.)
After over a year of hearings, featuring Big Tech, Rep. Cicilline formed a more cynical view of the industry, with the panel’s report noting clearly that tech companies are abusing their market power.
The report recommended that Congress consider legislation that would stop tech companies from owning expanding lines of business, and could under certain scenarios create a legislative mandate to break monopolistic tech up,
Rep Cicilline is slated to introduce in 2021 antitrust legislation that is expected to focus on anticompetitive conduct and mergers.
While each senior congressional members has slightly different emphasis, the two have signaled they will consult with each other’s offices as separate legislation is finalized.