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Klobuchar Bill Provides New Antitrust Tools to Get at Edge Giants

Sen. Klobuchar

Sen. Klobuchar

Sen. Amy Klobuchar (D-Minn.), ranking member of the Judiciary Committee, has introduced a bill that could give antitrust authorities more tools to pursue potentially anticompetitive edge giants, including by fining them up to 15% of revenues for violations. 

The bill, The Anticompetitive Exclusionary Conduct Prevention Act, would "deter anticompetitive abuses that distort the competitive process and harm consumers, innovation, and new business formation." 

Currently the Department of Justice and Federal Trade Commission are investigating situations where large online companies like Google or Facebook buy up smaller potential competitors, and whether current antitrust law captures that as potential exclusionary conduct given that the companies being bought are too small to raise anticompetitive red flags at the time of purchase. 

Related: Senators Seek DOJ Assurances Google Investigation Includes Search

“We have a major monopoly problem in this country, which harms consumers and threatens free and fair competition across our economy," said Klobuchar of the bill. "Companies need to be put on notice that exclusionary behavior that threatens competition cannot continue. 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.” 

She cited online commerce as well as pharmaceuticals and agriculture when talking about "harmful exclusionary practices by powerful companies [that] threaten free and fair competition, as decades of federal court decisions have chilled enforcement under existing laws." 

The bill: 

1. "Amends the Clayton Antitrust Act to prohibit 'exclusionary conduct' that presents an 'appreciable risk of harming competition.' 

  a. "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.' 

  b. "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. 

2. "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.  

3. "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. " 

“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.” 

Co-sponsoring the bill were Sens. Richard Blumenthal (D-N.Y.)
 and Cory Booker (D-N.J.).