Klobuchar Introduces Bill Raising Bar for Tech Deals--Update
05 February 2021 - 9:36AM
Dow Jones News
By Ryan Tracy
WASHINGTON -- Sen. Amy Klobuchar (D., Minn.), the incoming head
of the Senate antitrust subcommittee, proposed broad changes to
U.S. antitrust laws Thursday as the newly Democratic-led Congress
begins to press the issue of perceived monopoly power in technology
and other industries.
The senator introduced legislation that would bar companies that
dominate their sectors from making acquisitions unless they can
prove their deals don't "create an appreciable risk of materially
lessening competition," according to a draft from Ms. Klobuchar's
office. Now, the burden is on the government to prove a merger
substantially lessens competition.
The proposals will likely face headwinds. Republicans didn't
sign on to many of the ideas when Ms. Klobuchar floated them during
the previous session of Congress, and businesses including big
technology companies are expected to oppose a significant rewriting
of antitrust laws.
Ms. Klobuchar is hoping that Democrats' control of the Senate
will improve odds of passage, and she will seek to build momentum
through a series of legislative hearings focused on monopoly
power.
"We have an increasing monopoly problem, really headlined by
what is happening with tech" but also extending across the economy,
Ms. Klobuchar said. "Our laws have to be as sophisticated as those
that are messing around with competition," she said.
Her effort follows years of bipartisan scrutiny of acquisitions
by tech giants including Facebook Inc. and Alphabet Inc.'s Google,
which have denied anticompetitive behavior. The Biden
administration is expected to continue antitrust lawsuits filed
last year targeting those two companies.
Tech industry representatives have cautioned against changes to
antitrust laws. The App Association, a trade group representing
small and midsize software companies, told the Senate antitrust
panel last year that restricting large firms could end up hurting
smaller players.
"When a large company with deep pockets gets told by a regulator
not to do certain things, they build walls, they don't build
bridges," said Morgan Reed, president of the association, at a
March 2020 hearing.
The bill would authorize a $484.5 million budget for the
antitrust division of the Justice Department and $651 million for
the Federal Trade Commission. Both amounts are about $300 million
more than under the current annual budgets, according to Ms.
Klobuchar's office. Some GOP lawmakers have also supported boosting
the agencies' budgets.
In the House, antitrust subcommittee chairman Rep. David
Cicilline (D., R.I.), is drafting his own legislation designed to
address issues raised during the previous session of Congress, when
that panel investigated the market power of Facebook, Google,
Amazon.com Inc. and Apple Inc.
Mr. Cicilline hasn't released detailed legislative proposals,
but he has suggested that he is considering legislation barring
large tech companies such as Amazon from both operating huge online
platforms and selling their own products on those platforms in
competition with other users. Such a proposal isn't included in Ms.
Klobuchar's bill.
"The time has come for real reform that takes on monopoly power,
restores competitive marketplaces, and puts the interests of
consumers and working people first," Mr. Cicilline said Wednesday
upon being renamed chairman of the House panel.
Some of Ms. Klobuchar's proposals place greater legal burdens on
companies with more than a 50% share of a market. In addition to
the restriction on acquisitions, the bill says that if a dominant
firm engages in conduct that deprives other companies of the chance
to compete, judges should presume that behavior is anticompetitive
unless the big company can prove otherwise.
The bill would also tell courts that companies can face
antitrust liability even if a claimant doesn't precisely define the
market in which the allegedly anticompetitive conduct took place,
reducing a hurdle that has tripped up lawsuits in the past. All of
these proposals could make violations of the antitrust laws easier
to prove in court.
To accompany significantly larger budgets, the Justice
Department and FTC would also get a new stick: the power to seek
fines for first-time civil antitrust violations
"You cannot take on trillion-dollar companies, the biggest
companies the world has ever seen, with just Band-Aids and duct
tape," Ms. Klobuchar said.
The idea of placing a tougher standard on approval of mergers by
large firms was recently endorsed by Makan Delrahim, who led the
Justice Department's antitrust division during the Trump
administration, and Rep. Ken Buck (R., Colo.), who is set to be the
top Republican on the House antitrust subcommittee.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
February 04, 2021 17:21 ET (22:21 GMT)
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