The Anticompetitive Exclusionary Conduct Prevention Act would deter anticompetitive abuses that harm consumers and innovation
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation today to deter anticompetitive abuses that distort the competitive process and harm consumers, innovation, and new business formation. The Anticompetitive Exclusionary Conduct Prevention Act prohibits anticompetitive exclusionary conduct that risks harm to the competitive process. It also makes reforms to improve antitrust enforcement across the board. The bill was cosponsored by Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ).
“We have a major monopoly problem in this country, which harms consumers and threatens free and fair competition across our economy. Companies need to be put on notice that exclusionary behavior that threatens competition cannot continue,” Klobuchar said. “Our legislation will deter anticompetitive abuses, helping to protect the competitive markets that are critical to ensuring fair prices for products and services, spurring innovation, and preserving opportunity for American entrepreneurs.”
Today’s economy – including key sectors like online commerce, pharmaceuticals, and agriculture – is characterized by growing market concentration and market power. Harmful exclusionary practices by powerful companies threaten free and fair competition, as decades of federal court decisions have chilled enforcement under existing laws. As a result, U.S. enforcement against the anticompetitive conduct of powerful firms has lagged behind efforts in other countries, creating an increased danger of our markets becoming less competitive and of our economy becoming less prosperous.
Overview Anticompetitive Exclusionary Conduct Prevention Act of 2019:
- Prohibit Anticompetitive Exclusionary Conduct: Amends the Clayton Antitrust Act to prohibit “exclusionary conduct” that presents an “appreciable risk of harming competition.”
- Shifts the Burden of Proof so that powerful companies that have a market share of greater than 50% or that otherwise have substantial market power would have to prove that their exclusionary conduct in the markets they dominate does not present an “appreciable risk of harming competition.”
- Allows DOJ and FTC to seek substantial civil penalties for violations of up to 15% of total U.S. revenues or 30% of the affected U.S. revenues in addition to other remedies available under the Clayton Act.
- Eliminate Unnecessary “Market Definition” Requirements: Courts often require claimants to prove a relevant market to establish liability under the antitrust laws, even in the face of clear evidence of competitive harm. The bill clarifies that the antitrust laws do not require definition of a relevant market, unless the statutory language explicitly requires it to resolve the case.
- Prevent Courts from Improperly Implying Antitrust Immunities: Courts have implied immunity from the antitrust laws for certain conduct based on the existence of federal regulation, in certain circumstances ignoring statutory savings clauses passed by Congress. This bill limits the ability of courts to imply antitrust immunity for regulated conduct.
The legislation has the support of leading national consumer welfare and antitrust policy organizations American Antitrust Institute, Consumer Reports, and Public Knowledge.
“AAI supports Senator Klobuchar’s bill to strengthen U.S. law to limit harmful conduct by dominant firms -an area of antitrust that has been largely unenforced for decades,” said Diana L. Moss, President, American Antitrust Institute. “The bill will set forth clear, strong, and needed criteria for policing conduct that is designed to drive rivals from markets. It should garner broad bi-partisan support from members of Congress who seek to protect our markets, competition, consumers, and workers.”
"Senator Klobuchar's bill addresses a key shortcoming in our law. Current antitrust law doesn't apply to a company until it already has a monopoly, or is on the verge of one -even when it has enough market power to sabotage the competitive process,” said George Slover, Senior Policy Counsel, Consumer Reports. “This targeted, measured bill would move the line where it needs to be to address the kinds of anticompetitive abuse we are seeing too much of in today's marketplace. This is particularly important as commerce and communications increasingly take place online, with dominant platforms presenting new challenges to making sure we have a competitive marketplace that works for consumers and for all who seek to reach them."
“For far too long, antitrust enforcers have been fighting with one hand tied behind their backs. This legislation will revitalize antitrust enforcement in exclusionary conduct cases by sharpening the tools of our antitrust agencies,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge. “We commend this effort to address the problem of exclusionary conduct to ensure these competitive harms do not escape scrutiny.”
In her role as Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Senator Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in major industrial sectors, including the telecommunications, technology, agriculture, and pharmaceutical sectors.
In September, in light of ongoing consolidation in the pharmaceutical sector, Klobuchar led a letter to Federal Trade Commission (FTC) Chairman Joseph Simons calling on the agency to closely scrutinize pharmaceutical mergers that raise competition issues. In the letter, Klobuchar and her colleagues raised concerns about the potential impact of these proposed transactions on pharmaceutical innovation and the potential harm to consumers that may come from the increased negotiating leverage of merging companies. The senators also urged the FTC to take all necessary steps to ensure that the terms of any consent decrees under which pharmaceutical mergers are allowed to proceed are effective in addressing threats to competition.
In August, Klobuchar introduced the Monopolization Deterrence Act to crack down on monopolies that violate antitrust law. The legislation would give the DOJ and FTC the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In letters to enforcers, the senators requested information regarding the existence and scope of the potential investigations.
Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.
Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. Klobuchar introduced both bills in February.
Text of the Anticompetitive Exclusionary Conduct Prevention Act can be found here.