WASHINGTON, D.C. — Today, Sen. Amy Klobuchar filed an antitrust bill that would shatter the bipartisan antitrust consensus of the last four decades. Her Competition and Antitrust Law Enforcement Reform Act would reverse the burden of proof for certain acquisitions by requiring the merging parties prove that the merger enhances competition. The bill would dramatically increase funding for the Federal Trade Commission and the Department of Justice’s Antitrust Division and allow the agencies to seek enormous civil fines for violations of the Sherman Act, on top of existing remedies such as treble damages.
“Sen. Klobuchar’s bill would move the United States towards a mother-may-I economy, where private companies would have to seek the government’s permission before engaging in routine transactions,” said Asheesh Agarwal, Deputy General Counsel of TechFreedom. “As the Council of Economic Advisers has explained, overly aggressive merger review could harm the economy by reducing venture capital funding for start-ups.”
Agarwal noted that the proposals break with the bipartisan consensus. “Major changes to the antitrust laws were opposed by the bipartisan Antitrust Modernization Commission and a majority of antitrust experts who submitted comments to the House Judiciary Committee’s Antitrust Subcommittee last year,” he continued.
Agarwal further explained that the bill civil fine provisions could chill procompetitive behavior. The bill would allow for civil fines, on top of treble damages and other remedies, of up to 15% an offender’s U.S. revenues or 30% of the combined revenue of all aggrieved parties in that line of business. “Antitrust law is rarely black and white. The risk of huge fines, apparently untethered from actual consumer harm, could discourage companies from routine, pro-consumer conduct.”
Instead of these proposals, Agarwal advocated for an incremental approach. “It’s far too early to throw out decades of antitrust consensus by radically rewriting the laws now. We’ve long supported increasing funding for the antitrust agencies and a handful of other reforms. But in general, Congress should let the current lawsuits play out against Google and Facebook and see how the new vertical merger guidelines fare in court,” Agarwal concluded.
We can be reached for comment at email@example.com. Read our related work including:
- Our piece on merger policy, which explains why flipping merger presumptions would hurt the economy.
- Our recent white paper, which explains how, throughout America’s economic history, large companies have acquired smaller firms in ways that helped consumers and advanced innovation.
- Episode #281 of the Tech Policy Podcast: Should companies be allowed to acquire their start-up competitors?
- Our analysis of the Google lawsuit
- Our analysis of how an overly aggressive antitrust lawsuit could benefit China.
- Our analysis of the House Judiciary Antitrust Report
- Our press release analyzing the House Judiciary Antitrust Report
- Our op-ed ahead of the recent antitrust hearings
- Our comments on the draft vertical merger guidelines
- Our press release on the vertical merger guidelines
- Szóka’s op-ed in The Seattle Times: Trump vs. Bezos: The president is on the wrong side of the Constitution
- Our 2018 coalition letter to Jeff Sessions warning against using the antitrust laws to influence online speech
- Our statement on the court decision blocking DOJ’s lawsuit to stop the AT&T/Time Warner merger
- Our 2015 coalition letter urging Congress to bar the FCC from imposing merger conditions not specific to harms caused by a merger, or that the FCC could not impose by regulation
About TechFreedom:TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.