U.S. Sen. Amy Klobuchar on Tuesday introduced a bill to reform antitrust law. The proposal is aimed at deterring competitive abuses, preventing harm to consumers, and improving the government’s ability to enforce existing antitrust law.
The legislation would narrow antitrust immunity, enable civil penalties, and shift burden of proof, according to a text of the bill. The Anticompetitive Exclusionary Conduct Prevention Act follows Klobuchar’s exit from the presidential race.
Many antitrust lawyers believe the change is long overdue in this realm, said Tom Cotter, a University of Minnesota law professor and expert on antitrust law.
“There is a feeling among many antitrust lawyers, among many economists, and others that antitrust law over the past couple of decades has been too lenient,” he said.
One of the last big updates to antitrust laws happened in the 1970s, and the economy has changed greatly since then.
“The bill, as I read it, intends to overrule or narrow certain Supreme Court opinions in particular over the past couple of decades relating to unilateral conduct, predatory pricing, market definition, antitrust immunities, and so on,” Cotter said. “I think that antitrust law probably does need a certain degree of correction.”
If passed, the law would narrow existing antitrust law precedents, he noted. Cotter said he thinks the effect would be largely beneficial to smaller firms, as it might allow them a more straightforward opportunity to get off the ground. But companies with a greater market share may be at risk for violating antitrust regulations.
“As I’m reading the bill, the companies that most have to be worried about potentially greater exposure to antitrust liability would be large firms,” he said “The overarching purpose of antitrust law is not to protect small companies. It is to protect competition. It is to protect consumers. But small companies might incidentally benefit.”
The bill can also be read as a way to scrutinize the larger tech companies, like Google, Amazon, and Facebook, Cotter said.
“I know Senator Klobuchar has been very concerned in recent years about some of the mergers that have gotten through and then later evidence seems to show they actually have resulted in higher prices for consumers,” he said.
But Michael Lindsay, a St. Thomas adjunct law professor who works in antitrust at Dorsey & Whitney, doesn’t think the law will be beneficial for competition.
“I applaud Senator Klobuchar for discussing the issues. The rules of antitrust are never going to be perfect, and it is always good to be thinking about ways in which they can be improved. Having said that, I don’t believe that this bill in its current form would result in a net improvement to competition,” Lindsay said. “Indeed, there are some aspects of the bill that would result in less competition.”
He also doesn’t think the bill corrects existing antitrust issues in the right way.
“I would say it runs a serious risk of overcorrecting for a problem that hasn’t been well-defined,” Lindsay said. “I think it would be far better to define more narrowly what someone thinks the problem is, and then try to correct for it.”
Lindsay thinks the bill would actually put smaller startup companies at risk for antitrust violations, because if a company has innovative new technology that potentially means it has a large market share.
“Remember this still is not tied to a company’s size, it’s tied to the company’s market share,” he said.
Lindsay doesn’t think the law has any likelihood of being passed in its current form, and that even if it was, it’d likely be vetoed.
“There is a long history of attempts to change the antitrust laws, and it’s really rare that anything happens,” he said.