Sen. Amy Klobuchar (D-MN) -- a leading voice in the call for antitrust law reform -- is preparing fresh legislation designed to block acquisitions of "maverick" or "disruptor" companies whose products and services are frequently better for consumers than those of the dominant companies that are acquiring them. In addition to giving more tools to antitrust enforcers, the former presidential candidate will also seek to increase funds for their efforts.
Sen. Klobuchar’s bill would prohibit “exclusionary conduct” that presents an “appreciable risk of harming competition” and would shift the burden of proof to dominant companies to prove that their exclusionary conduct is not anticompetitive. The bill gives the DOJ and FTC authority to seek substantial statutory monetary penalties.
The bill -- described in an earlier post on the MoginRubin Blog -- also proposes to eliminate market definition as a requirement to establishing liability under the antitrust laws unless the statute explicitly requires it.
The bill would limit the ability of courts to imply antitrust immunity for regulated conduct or ignore statutory antitrust savings clauses passed by Congress.
The changes embodied in the proposal would signify the most consequential amendment of the antitrust laws since the Hart-Scott-Rodino merger control legislation in 1976.
The Minnesota senator will soon have more power to advance her agenda. She is the incoming chair of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, which is tasked with oversight of antitrust enforcement at the Department of Justice and Federal Trade Commission and monitoring the state of competition in a variety of industries to help protect consumers. Her previous efforts were thwarted due to the Democrat's minority status in the Senate.During antitrust hearings last year, she said, "We're seeing a startup slump. We're seeing more and more consolidation, and throughout history, we've seen that is not good for small businesses. It's not good for consumers, and it's not good for capitalism in the end."
In questioning Facebook CEO Mark Zuckerberg during those hearings, she noted Facebook’s actions to limit smaller competitors, as defined by the company, from accessing parts of its platform. She said this damages the ability of these smaller players to grow.
She told Zuckerberg: “So, I want to start with exclusionary conduct, regarding excluding smaller competitors by limiting interoperability with the Facebook platform. The investigation that we saw in the House recently gave us a number of examples of excluded companies including Vine, Stackla, Message Me, and Ark. My view is that this exclusionary conduct not only damaged the ability of these smaller businesses to compete, but it deprived customers of convenient access. You're one of the most successful companies, biggest companies in the world, Mr. Zuckerberg. Facebook. Do you think that this is fair competition or not? With regard to the interoperability and how you've conducted yourself with these other companies?”
Here are some of our previous posts in which we discuss efforts by large companies to buy smaller disruptors or mavericks:
Remedy or Misadventure? DOJ Proposes Creation of New Competitor to Allay T-Mobile/Sprint Anticompetition Concerns.
FTC Moves to Block Acquisition of Innovative Player That Has Been Good to Wet-Shave Razor Consumers.
Dining Delivery Disruptors Disrupted: DOJ, FTC Should Examine Uber's Planned Purchase of Grubhub, Senators Say.
Edited by Tom Hagy for MoginRubin LLP.