Quick Facts About the Antitrust Bills Introduced in The Senate (Part 1)
By Matthew Moore and Taline Sahakian
Antitrust law was due for an update—and that day may have come.
When the Democrats took control of the White House, Senate and House of Representatives, it was expected that they would seek to reform the antitrust laws. Even the Republicans on the Senate antitrust subcommittee were chomping for change. And indeed, this Senate has seen a number of bills proposed that would remake antitrust in significant ways.
The most seismic bill introduced in the Senate is the Competition and Antitrust Law Enforcement Reform Act (CALERA). Sponsored by Senator Amy Klobuchar (D-MN), it proposes a broad reworking of United States antitrust policy.
Here are our quick-take analyses of CALERA and some smaller-bore, bills.
Competition and Antitrust Law Enforcement Reform Act of 2021 (S.225) (CALERA)
Whom does the bill affect?
The bill affects most directly firms that have a greater than 50% market share (as a seller or buyer) or that otherwise possess significant market power. The legislations is not targeted to a specific industry.
What does the bill try to do?
CALERA would change antitrust standards for reviewing mergers and exclusionary conduct and address certain limitations created by case law over the years.
Mergers and Acquisitions
The bill would amend Section 7 of the Clayton Act to prohibit unlawful acquisitions if they “create an appreciable risk of materially lessening competition or  tend to create a monopoly or monopsony.” This would modify the current standard which states that an unlawful acquisition is one that “substantially lessens” competition or tends to create a monopoly. The amendments would also clarify that antitrust laws are concerned with monopsony (buyer-side) power as much as monopoly power.
The amendment enumerates instances where an acquisition may be seen to create an appreciable risk of materially lessening competition. For example, such a risk would be recognized if the acquisition leads to a significant increase in market concentration or if the acquiring entity already has or would obtain, by virtue of the acquisition, control of over 50% market share as a buyer or seller. Defendants would be able to rebut any presumptions of anticompetitive effects by a preponderance of the evidence showing otherwise.
CALERA would amend the Clayton Act to include a prohibition on “exclusionary conduct,” which would be defined as conduct that “materially disadvantages 1 or more actual or potential competitors” or “tends to foreclose or limit the ability or incentive of 1 or more actual or potential competitors to compete.” The bill clarifies that “applying for or enforcing a patent, trademark or copyright” (provided that such conduct is not baseless and made in bad faith) “shall not alone constitute exclusionary conduct,” but it may be considered as part of a course of exclusionary conduct.
The bill also relieves some of the burden on proving exclusionary conduct by stating that a violation does not require a finding of, for example: (1) below cost pricing, (2) termination or alteration of a prior course of conduct; (3) harm on both sides of the defendant’s multi-sided platform.
The amendment would thus modify the standards created by case law under Section 2 of the Sherman Act (e.g., for refusals to deal, predatory pricing or analysis of conduct in two-sided markets).
The bill clarifies that defining a relevant market is not necessary to establish liability under the antitrust laws, and that direct evidence proving actual or likely harm to competition is sufficient to establish liability.
Creation of an Office of the Competition Advocate
CALERA would create an Office of the Competition Advocate within the FTC, which would recommend processes and procedures, publish market reports on issues affecting competition, and exercise subpoena power.
The bill provides for civil penalties for violations of the new exclusionary conduct prohibitions under the Clayton Act, under Section 5 of the FTC Act, and under Sections 1 and 2 of the Sherman Act.
Provisions related to Whistleblowers
The bill provides Whistleblowers with anti-retaliation protections and the ability to obtain rewards for bringing forward information on the violation of antitrust laws.
What is the current Status?
CALERA was introduced in Congress on February 4, 2021, and referred to Committee. Follow here.
Are there related bills?
The Consolidation Prevention and Competition Promotion Act of 2021 (S. 3267) is a watered-down version of CALERA. It contains the provisions on mergers, on the creation of the Office of the Competition Advocate and on market definition, for example. However, this bill, which was introduced on November 18, 2021, does not contain the new exclusionary conduct provisions, does not allow for civil penalties, or provide whistleblowers with added protections or rewards. Sen. Klobuchar introduced a similar bill in 2019 by the same name.
Other Senate Bills that Have a Narrower Focus
The Trust-Busting for the Twenty First Century Act (S. 1074), which has some similarities at the margins with CALERA and the American Innovation and Choice Online Act was introduced in April 2021. It has no co-sponsors and is not likely to move very far.
The State Antitrust Enforcement Venue Act of 2021 (S. 1787) introduced by Senator Mike Lee (R-UT) has a very narrow scope. It would limit the ability of defendants to transfer the venue of cases brought by State Attorneys General. The bill was placed on Senate Legislative Calendar under General Orders. Calendar No. 261 and can be followed here. It is similar to The State Antitrust Enforcement Venue Act of 2021 (H.R. 3460) introduced by Rep. Ken Buck (R-CO-4).
The Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics Act” or the “Stop STALLING Act” (S. 1425) introduced by Senator Klobuchar aims at drug companies. It would authorize the FTC to pursue civil penalties against those who are found to have filed sham petitions with the FDA, delaying the entry of generic drugs. Senator Klobuchar introduced the same act in 2019. It does enjoy bipartisan support, with Sen. Chuck Grassley (R-IA), Sen. Joni Ernst (R-IA), and Sen. Ted Cruz (R-TX), among its cosponsors.
In our next installment, we’ll touch on another legislative area which has bipartisan support and is the site of recent activity: Senate bills aimed at Big Tech platforms.
Written by Matthew Moore and Taline Sahakian
Edited by Gary J. Malone
Tagged in: Antitrust Enforcement, Antitrust Legislation,