Critics of modern antitrust enforcement have been building momentum towards antitrust reform over the last several years. In the first week of February 2021, several members of Congress signaled that bipartisan legislative efforts are on the table for the new Congress:
- In the House, the Democratic Chairman of the House Judiciary Committee’s Antitrust Subcommittee David Cicilline (D-RI) and Ranking Member Ken Buck (R-CO) issued statements indicating a strong interest in working together to address competition concerns related to digital platform companies.
- In the Senate, Josh Hawley (R-MO) proposed an amendment to the budget resolution that would pave the way for legislation to prohibit mergers and acquisitions by “market dominant online platforms.”
- The following day, Amy Klobuchar (D-MN), the incoming chair of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced the Competition and Antitrust Reform Act. Senator Klobuchar described the proposed legislation as “the first step to overhauling and modernizing” the antitrust laws.
This alert discusses these early steps towards possible antitrust reform, and the likelihood and expected timing that antitrust reform efforts could move forward in this Congress.
House Antitrust Subcommittee Leadership
On February 3, Mr. Cicilline and Mr. Buck were formally appointed to serve as the leaders of the Antitrust Subcommittee. Both members issued statements committing to work on a bipartisan basis to strengthen antitrust enforcement. Mr. Cicilline cited consolidation in tech, health care, retail, and transportation, and said “the time has come for real reform takes on monopoly power.” In a separate statement, Mr. Buck said that “the ball is clearly in Congress’s court.”
Mr. Cicilline and Mr. Buck worked together in the last Congress on a 16-month investigation into competition in digital markets. The bipartisan investigation featured a series of hearings, including a high-profile hearing with the CEOs of of the major digital platforms. In October 2020, the Democratic Majority staff released a 450-page report with a slate of recommendations for legislative reform. Mr. Buck and three Republican colleagues separately published The Third Way, a report outlining areas of bipartisan agreement in the House Judiciary Committee’s digital platform investigation.
The statements from Mr. Cicilline and Mr. Buck, as well as the Third Way report, suggest that there is a real potential for bipartisan antitrust legislation to advance in the House in 2021.
The Hawley Amendment
Also on February 3, Senator Hawley accused “Big Tech robber barons” of taking advantage of smaller competitors during the pandemic and urged Congress to act to stop “unprecedented concentration of corporate power from becoming the new normal.” Senator Hawley introduced an amendment to the proposed Congressional budget resolution that would create a placeholder for future legislation to presumptively prohibit mergers and acquisitions by companies that operate “market dominant online platforms.”
Senator Hawley’s proposal for future legislation is similar to a recommendation made in the House Judiciary Committee’s report on competition in the digital markets. The House report recommended that lawmakers consider introducing a structural presumption that would shift the burden of proof to certain merging parties to show that their merger would not reduce competition. The House report did not offer details about when this presumption would apply, recommending only that mergers resulting in “an outsized market share” or “a significant increase in concentration” would be presumptively prohibited. This proposed structural presumption would then place the burden of proof on the merging parties to show that their proposed merger would not reduce competition.
Senator Hawley’s amendment was one of almost 889 amendments to the $1.9 trillion budget and was not offered on the floor for a vote. However, his amendment signals that there could be bipartisan support for legislation that would impose a structural presumption against certain mergers (for example, mergers involving companies above a size or market share).
The Klobuchar Bill
On February 4, 2021, Senator Amy Klobuchar introduced the Competition and Antitrust Reform Act. The proposed legislation would make sweeping changes to the federal antitrust laws, including:
- Authorizes a substantial increase in budgets for the FTC and DOJ Antitrust Division for fiscal year 2022,
- Provisions to enable more aggressive merger enforcement by lowering the burden of proof to challenge mergers and by shifting the burden of proof to merging parties for certain transactions,
- A new standard for single-firm conduct that would prohibit “exclusionary conduct” that presents an “appreciable risk of harm to competition,”
- New penalties that would empower the FTC and DOJ to seek civil penalties of up to 15% of a defendant’s total U.S. revenue or 30% of the affected U.S. revenue,
- Measures to clarify and overturn existing case law, including the requirement to define a relevant market in many antitrust cases and the application of implied immunity based on the existence of federal regulation, and
- Additional tools to analyze antitrust enforcement efforts, including provisions authorizing merger retrospectives and studies by a new Office of Competition Advocate (with subpoena authority) housed within the FTC.
Senator Klobuchar has introduced similar reform measures in the past; however, the Competition and Antitrust Reform Act would constitute among the most sweeping changes to the antitrust laws since the laws were passed in the late ninetieth and early twentieth centuries.
If enacted in its current form, Senator Klobuchar’s proposal would eliminate several key challenges the agencies and private plaintiffs face in antitrust cases. Acting FTC Chair Rebecca Kelly Slaughter described the legislation as a “total game-changer” that would make enforcement “eminently easier.”
There are hurdles to any of the major proposals from the House or Senate moving forward in the near term. As long as the legislative filibuster remains in place in the Senate, Democrats will need to garner at least some bipartisan support to amend the antitrust laws. And while some Republicans have signaled that they may be receptive to the type of reforms in Senator Klobuchar’s bill, others are focused elsewhere. For example, last week, Senator Lee said through a spokesperson that he was open to working on antitrust reform, but that he planned to do so by reintroducing his One Agency Act, which would transfer the FTC’s antitrust enforcement authority to DOJ.
In the coming weeks and months, Democrats are expected to introduce more modest bills aimed at garnering bipartisan support. Whether proposals move forward in the current Congress depends on a number of political dynamics, including whether the House and Senate can reach bipartisan agreement, how and whether members work together on related efforts to regulate digital platforms (for example, changes to Section 230), and the position of the Biden Administration on antitrust reform.