Senator Klobuchar Introduces New Antitrust Bill that May Spell Trouble for Tech Giants

Last year, Congress made it clear that tech giants such as Apple, Facebook, and Google will face growing antitrust scrutiny.  In October 2020, the Department of Justice sued Google for alleged anticompetitive tactics, such as using tying arrangements that force preinstallation of Google’s search applications on mobile devices.  And now United States Senator Amy Klobuchar (D-MN) has introduced a new antitrust bill—the Competition and Antitrust Law Enforcement Reform Act—that according to a press release on her website, will “reinvigorate America’s antitrust laws and restore competition to American markets.”  The press release specifically takes aim at tech giants, noting that “U.S. antitrust law enforcement against powerful firms has lagged efforts in other developed countries, particularly when it comes to enforcement against the dominant digital platforms and other large corporations.”  

The bill seeks to accomplish several things.  First, it will increase the budgets of the Justice Department’s Antitrust Division and the Federal Trade Commission (“FTC”)—the two premier U.S. agencies that enforce the antitrust laws at the criminal and civil level.  Next, the bill will heighten the standard that needs to be met for firms to merge, by amending the Clayton Act to forbid mergers that “create an appreciable risk of materially lessening competition.”  “Materially” is defined as “more than a de minimus amount.”  The current standard only prohibits mergers that “substantially lessen competition.”  The bill will also create a new provision of the Clayton Act that prohibits “exclusionary conduct” that presents an “appreciable risk of harming competition.”  The bill defines “exclusionary conduct” as conduct that “materially disadvantages 1 or more actual or potential competitors” or “tends to foreclose or limit the ability or incentive of 1 or more actual or potential competitors to compete.”

Under the bill, the FTC will grow not only in power, but also in size.  The bill calls for the establishment of a new “Office of the Competition Advocate” within the FTC. Among the several enumerated “duties” of the new Office includes the duty to “provide recommendations to other Federal agencies about administrative actions that may have procompetitive effects.” Within the new Office of the Competition Advocate, the bill will also create the “Division of Market Analysis,” tasked with “conduct[ing] investigations of markets or industry sectors to analyze the competitive conditions and dynamics affecting such markets or industry sectors, including the effects that market concentration, mergers and acquisitions, certain types of agreements, and other forms of business conduct have on competition, consumers, workers and innovation.”  The new Division will be expected to publicly publish reports on such investigations.  

It remains to be seen whether the bill will pass.  But if it does, the tech giants of today should expect to change the way they conduct business and interact with smaller, nascent competitors. 

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.

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About David Calvello

David Calvello is a Senior Associate in Faruqi & Faruqi, LLP's New York office. He mainly practices in the area of antitrust litigation with a focus on competition in the pharmaceutical industry. He has worked on multiple cases that resulted in significant settlements, including In re Lidoderm Antitrust Litigation, 14-md-02521 (N.D. Cal.) ($166M settlement) and In re Solodyn Antitrust Litigation, 14-md-02503 (D. Mass.) ($76M settlement).

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Senior Associate at Faruqi & Faruqi, LLP

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