Concluding its comprehensive three-year review of US federal antitrust laws, the Antitrust Modernization Commission has released its Report and Recommendations. The 12-member bipartisan Commission was established by a 2002 act of Congress to determine how to modernize the antitrust laws and to report to Congress and the President its findings and recommendations for legislative or administrative action. In a letter to the President and Congress accompanying the Report, the Commission’s chair, Deborah A. Garza, and vice-chair, Jonathan R. Yarowski, lauded the Report as “the product of a truly bipartisan effort.” Despite the diversity of views considered, “the Commission was able to reach a remarkable degree of consensus on a number of important principles and recommendations,” they said.
Among other things, the Report recommends:
- Revising laws governing private antitrust litigation. Although the Report recommends no change to the fundamental remedies available for private litigants – namely, treble damages and attorney’s fees – it proposes legislation that would promote a more equitable distribution of antitrust judgments among non-settling defendants. Under the current legal framework, nonsettling defendants in an antitrust conspiracy case may be saddled with joint and several liability, no right of contribution among defendants, and only limited rights to a reduction of liability when a codefendant settles. The report calls for legislation that would allow for contribution among nonsettling defendants.
- Enacting legislation to allow federal indirect purchaser actions. The Report recommends legislation that would effectively overrule the current ban on federal indirect purchaser actions established in the Illinois Brick and Hanover Shoe Supreme Court decisions. The antitrust laws of 36 states currently allow indirect purchaser actions, thus generating simultaneous litigation of similar claims in courts throughout the country. The Report recommends legislation that would allow all claims to be heard in a single federal court and limit damages to the overcharges paid by direct purchasers.
- Repealing the Robinson-Patman Act (RPA). The RPA prohibits sellers from discriminating in prices between purchasers of equivalent goods when such discrimination would result in competitive injury. According to the Report, the RPA effectively promotes competitors over competition, punishes procompetitive behaviors such as price discounting and innovations in distribution, and does not protect small businesses as was originally intended.
- Limiting statutory antitrust exemptions. The Commission weighed in on initiatives currently before Congress that would remove statutory antitrust immunities, such as currently enjoyed by the insurance industry and ocean liner shipping conferences. According to the Report, such immunities should be rarely, if ever, allowed, and then only where (i) “competition cannot achieve important societal goals that trump consumer welfare,” or (ii) “a market failure clearly requires government regulation in place of competition.”
- Improving merger control. The Report recommends greater weight be given in merger enforcement decisions to efficiencies and innovations created through the proposed transaction. The Report further recommends that the federal enforcement agencies take measures to eliminate the delay in merger review caused by deliberations over which agency will review a particular transaction.
- Increasing cooperation with foreign antitrust enforcement agencies. The Report recommends several measures to increase cooperation with foreign antitrust agencies including developing an international premerger notification system, seeking international convergence of competition principles, and budgeting funds to provide technical assistance to foreign agencies. The Report also recommends, as a general matter, that US courts not have jurisdiction to decide antitrust cases based on purchases made outside the United States from sellers outside the United States.
The report is available to the public through a link on the Commission’s website: www.amc.gov.