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With largely bipartisan support, antitrust enforcement has been on a rather dramatic uptick in the past few years. Critiques of a narrow focus on the consumer welfare standard have been advanced, the agencies have stepped up the scope and pace of their work and a plethora of articles in the popular press have called for more aggressive enforcement. The press have blamed everything from low wage growth to purportedly dominant online platforms on a supposedly outdated \u201cChicago School\u201d economic approach that has been equated with a laissez faire mentality. Against this backdrop, it is not surprising that antitrust law itself has been amended and that discussions of future amendments continue to percolate actively at the federal and state levels. This is a notable development given that the main federal antitrust laws have been in place for more than a century and the most recent amendment of any significance (the Foreign Trade Antitrust Improvements Act, or FTAIA) is 40 years old.<\/p>\n\n\n\n
Let\u2019s start with the bills that have already been enacted. Last year, Congress passed the Competitive Health Insurance Reform Act of 2020 (Public Law No. 116-327). That law repeals the McCarranFerguson Act\u2019s (15 U.S.C. \u00a7\u00a7 1011, et seq.) federal antitrust exemption for health and dental insurance (which to begin with was a complicated and never full exemption). At the same time, however, the law expressly permits (1) the collection, compilation or dissemination of historical loss data; (2) determination of a loss development factor applicable to historical loss data (a component of how insurers usually calculate rates); (3) the performance of actuarial services if they do not amount to a restraint of trade; and\/or (4) the development of standard insurance policy forms, provided that the insurers do not agree to adhere to the terms of such forms. Thus, in many cases, the new law does not fundamentally alter the federal landscape. That said, it is important to keep in mind that state law antitrust regulation of health insurance remains in force.
At the end of 2020, Congress also passed the Criminal Antitrust Anti-Retaliation Act of 2019 (Public Law No. 116-257). That law provides \u201cwhistleblower\u201d protections to private sector employees who report criminal antitrust violations or assist in federal investigations and prosecutions.
Now let\u2019s turn to the bills still being considered. In 2021, both Republicans and Democrats introduced six antitrust bills in the House (some of which were also introduced in the Senate). These bills focused on curbing the purported power of technology platforms. Last April, the Senate antitrust subcommittee (chaired by Senator Amy Klobuchar) held a hearing on competition in app store markets. (Senator Klobuchar has written an entire book on antitrust. The title, \u201cAntitrust,\u201d is generic, but its subtitle, \u201cTaking on monopoly power from the gilded age to the digital age,\u201d gives a better sense of its contents.) As of this writing, two major or important bills are still actively being considered: the \u201cCompetition and Antitrust Law Enforcement Reform Act\u201d (\u201cCALERA\u201d) and the \u201cOpen App Markets Act.\u201d
CALERA would do several things. It would increase the federal antitrust enforcement budgets. It would also amend the Clayton Act to prohibit mergers that could \u201ccreate an appreciable risk of materially lessening competition \u201cmore than a de minimis amount\u201d (as opposed to the current standard which prohibits mergers that \u201csubstantially lessen competition\u201d) and for certain types of mergers it would shift the burden of proof in court to the merging parties rather than the government. It also would prohibit \u201cexclusionary conduct\u201d by dominant firms, i.e., conduct that materially disadvantages competitors or limits their opportunity to compete that presents an \u201cappreciable risk of harming competition.\u201d
The proposed Open Markets Act would regulate digital technology platforms. Among other things, it would prohibit those platforms from requiring application developers to use the platforms\u2019 in-app payment systems, allow app developers to sell their software directly to users, and prohibit platforms from unreasonably preferencing their own applications \u2013 subject to an exception where necessary to achieve user privacy, security, or digital safety.
Other bills are also being considered \u2013 in March, Senator Elizabeth Warren and Representative Mondaire Jones introduced the \u201cProhibiting Anticompetitive Mergers Act\u201d that would authorize the FTC and DOJ to reject certain deals out of hand.
The federal government is not alone in revisiting the antitrust statutes. Last year, the New York Senate passed an antitrust bill (S933A) which if enacted would have wide-ranging effects. Among other things, the bill would extend the reach of the Donnelly Act (New York\u2019s antitrust law) by enacting \u201cabuse of dominance\u201d provisions. The bill would create a presumption of dominance based on market shares (and would also provide that dominance may be established in other ways). The bill also sets forth a number of categories of \u201cabuse,\u201d including leveraging, certain refusals to deal and the like. The bill would also enact a premerger review program separate and apart from the federal Hart-Scott-Rodino premerger notification system and would require New York review for mergers falling below the federal thresholds. The bill would also allow a prevailing party\/plaintiff to recover expert (economist) fees. Whether these provisions would be salutary additions to U.S. antitrust law or would impose burdensome, expensive and duplicative state court regulation remains to be seen.
As Ernest Hemingway wrote, one goes bankrupt in two ways \u2013 first gradually and then suddenly. The development of U.S. antitrust law may be somewhat similar \u2013 the basic laws have remained largely unchanged for almost a century, with only minor modifi-cations. The dam holding back additional amendments, however, might soon be breaking.
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Mr. Ullman<\/em><\/strong> is of counsel with Orrick, Herrington & Sutcliffe LLP. hullman@orrick.com<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By Howard Ullman, Orrick, Herrington & Sutcliffe LLP With largely bipartisan support, antitrust enforcement has been on a rather dramatic uptick in the past few […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[8,3,20],"tags":[],"_links":{"self":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1327"}],"collection":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/comments?post=1327"}],"version-history":[{"count":5,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1327\/revisions"}],"predecessor-version":[{"id":1366,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1327\/revisions\/1366"}],"wp:attachment":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/media?parent=1327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/categories?post=1327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/tags?post=1327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}