WASHINGTON—U.S. Senators Chris Murphy (D-Conn.) and Richard Blumenthal (D-Conn.) joined 12 of their Senate colleagues in reintroducing legislation to reinvigorate America’s antitrust laws and restore competition to American markets. The Competition and Antitrust Law Enforcement Reform Act will give federal enforcers the resources they need to do their jobs, strengthen prohibitions on anticompetitive conduct and mergers, and make additional reforms to improve enforcement.

“A few major companies control almost every aspect of our lives, driving up costs and stifling innovation. This legislation will help enforcers break up concentrated power and help wrestle control back from the corporate giants that are to blame for so many of our daily indignities,” said Murphy.

 “Antitrust laws protect consumers, workers, and businesses, leading to innovation and better products. Federal agencies need more resources and stronger laws to effectively police and punish illegal practices.  That’s why I’m proud to cosponsor this legislation that will restore competition and protect against the collusion and market dominance that stifle innovation and harm Americans,” said Blumenthal.

U.S. Senators Amy Klobuchar (D-Minn.), Sheldon Whitehouse (D-R.I.), Cory Booker (D-N.J.), Mazie Hirono (D-Hawaii), Peter Welch (D-Vt.), Michael Bennet (D-Colo.), Martin Heinrich (D-N.M.), Edward Markey (D-Mass.), Tina Smith (D-Minn.), Brian Schatz (D-Hawaii), Mark Warner (D-Va.), and Ron Wyden (D-Ore.) also cosponsored the legislation.

Many industries are consolidating as large mergers and acquisitions increase. Big companies are buying 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. U.S. antitrust law enforcement against powerful firms has lagged behind 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:

1. Increase Enforcement Resources

For years, enforcement budgets at the Justice Department’s Antitrust Division and Federal Trade Commission have 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 and ensure enforcers retain all fees generated from mergers for enforcement work.

2. 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 ripen and cause harm. As the law has been interpreted today, enforcers can block only the most egregious acquisitions, which has allowed many harmful mergers to escape scrutiny. To remedy this, the Competition and Antitrust Law Enforcement Reform Act 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.” By adding a risk-based standard and clarifying the amount of likely harm the government must prove, enforcers can more effectively stop anticompetitive mergers. The bill also clarifies that mergers that create a monopsony (the power to unfairly lower the prices a company it pays or wages it offers) violate the statute.
  • Shift the burden to the merging parties to prove their merger will not violate the law. Certain categories of mergers pose significant risks to competition, but are still difficult and costly for the government to challenge in court. For those mergers, the bill shifts the legal burden from the government to the merging companies, which would have to prove that the merger does not create an appreciable risk of materially lessening competition or tends to create a monopoly or monopsony. These categories include:
    • Mergers that significantly increase market concentration
    • Acquisitions of competitors or nascent competitors by a dominant firm (defined a 50% market share or possession of significant market power)
    • Mega-mergers valued at more than $5 billion 

3. Prevent Harmful Dominant Firm Conduct

Decades of flawed court decisions have weakened the effectiveness of Section 2 of the Sherman Antitrust Act to prevent anticompetitive conduct by dominant companies. The bill creates a new provision under the Clayton Act to prohibit “exclusionary conduct” (conduct that materially disadvantages competitors or limits their opportunity to compete) that presents an “appreciable risk of harming competition.”

4. The legislation would establish a new FTC division to conduct market studies and merger retrospectives.

5. Implement Additional Reforms to Enhance Antitrust Enforcement

The Competition and Antitrust Law Enforcement Reform Act will also implement a series of reforms to seek civil fines for antitrust violations, study the effect of past mergers, strengthen whistleblower protections, forbid forced arbitration in class action lawsuits, and more.

This legislation is endorsed by the American Antitrust Institute, Consumer Reports, Open Markets Institute, Public Knowledge, and COSAL. It is also endorsed by antitrust scholars including, Professor (emeritus) Jonathan Baker of American University Washington College of Law; Professor Nancy Rose of Massachusetts Institute of Technology; Professor (emeritus) Steven Salop of Georgetown University Law Center;  Professor Fiona Scott Morton of the Yale University School of Management; Bill Baer, former Assistant Attorney General for Antitrust; Gene Kimmelman, former Deputy Assistant Attorney General for Antitrust; Professor John Newman Professor of Law, University of Miami and former Deputy Director of the FTC Bureau of Competition; and Professor Martin Gaynor and former Director of the FTC Bureau of Economics. 

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