DJ Klobuchar Introduces Bill Raising Bar for Tech Deals--Update
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.
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(END) Dow Jones Newswires
February 04, 2021 17:06 ET (22:06 GMT)
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