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By Liz Crampton
Sen. Amy Klobuchar (D-Minn.), a leader among Democrats on antitrust issues, is seeing a lukewarm reception from some practitioners and business leaders to her proposal to overhaul how mergers are reviewed.
But her legislation, introduced last week, takes the first steps in addressing demands from progressives that the government better manage market consolidation.
One measure (S. 1812) would amend key pieces of the bedrock 1914 Clayton Act by requiring merging companies to prove their mega-deals are good for competition. The other, less ambitious bill (S. 1811) would apply a sliding scale to the fees merging companies pay when filing for government review, charging larger transactions more than smaller ones.
“There’s widespread consensus that enforcement is effective and doesn’t need to be fixed. The idea that something is terribly wrong isn’t well received,” said David Kully, a partner at Holland & Knight and former DOJ official, referring to the antitrust bar.
Klobuchar’s bills, Kully told Bloomberg BNA, “could pretty materially change merger enforcement.”
Antitrust officials in both Republican and Democratic administrations have said that if the public doesn’t like how competition laws are enforced, the law should be changed. Klobuchar took that to heart by offering legislation that would alter how big mergers are investigated by regulators. Her proposals wouldn’t take on already dominant companies like Google Inc. or Amazon.com Inc., actions that some advocates are seeking. But it goes farther than her past antitrust proposals, which largely has focused on individual industry sectors like pharmaceuticals.
Sean Heather, vice president of the U.S. Chamber of Commerce’s Center for Global Regulatory Cooperation, sees Klobuchar’s latest legislation as a shift to the left.
“The chamber and Sen. Klobuchar do not look at antitrust in exactly the same way,” he told Bloomberg BNA. “However, she has historically been a person that’s taken a thoughtful, but different approach to antitrust.”
“This represents, on some level, a departure,” he added.
The legislation could face a long road in the Senate. So far, only Democrats support the bills. It’s unknown if Sen. Mike Lee (R-Utah), chairman of the Judiciary Committee’s antitrust subcommittee, will even schedule a hearing to debate the merits of the bills. Lee’s office didn’t respond to a request for comment. And Congress hasn’t voted on major antitrust legislation in decades.
Speaking on the Senate floor about Klobuchar’s proposals this week, Lee stressed enforcement. “Although I don’t agree with all of their proposed solutions, I do agree with my colleagues from across the aisle that antitrust enforcement should be a priority,” he said.
Klobuchar, the ranking member of Judiciary’s antitrust subcommittee, is the logical choice to introduce antitrust legislation after Democratic leaders earlier this year said regulators should be allowed to break up big companies if they’re hurting consumers. Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) argued in their economic agenda that it should be harder for big companies to merge.
Progressive groups like the Roosevelt Institute say the government’s current antitrust analysis, focused almost entirely on price effects, is too narrow. Klobuchar’s more modest antitrust bill responds to that. It would require the Comptroller General to study the impact of mergers on wages, employment, innovation, and startups.
The same bill would create an “Office of the Competition Advocate” to help consumers with complaints, encourage antitrust investigations, and create reports on merger activity. It also would require companies to track the effectiveness of remedies, like divestitures, that the government orders to alleviate the competitive harms of a merger.
The Justice Department would greatly benefit from such evaluations because it currently has no ability to conduct such studies. The Federal Trade Commission conducts some analyses of its work, but antitrust practitioners say they could use a lot more information.
Hype over antitrust has spread in the last few years, and it isn’t limited to Democrats. No Labels, a bipartisan political group, became the latest organization to advocate making changes to antitrust law. The group this month called for revisions to the 125-year old Sherman Act to make it easier for the government to go after tech companies like Google and Facebook Inc., which it considers near-monopolies.
More liberal members of the Senate, such as Sens. Bernie Sanders (I-Vermont) and Elizabeth Warren (D-Mass.), have called for breaking up big corporations that abuse their power. Klobuchar’s legislation doesn’t go that far.
Some prominent advocates for increased antitrust enforcement — American Antitrust Institute President Diana Moss and former Federal Trade Commission official David Balto among them — say the government already has all the tools it needs to maintain competitive markets. It just needs to use them. Balto now runs his own law firm.
The demand for new antitrust laws has largely come from outside the antitrust practitioners’ arena — consumer think tanks and advocacy groups that say U.S. officials have cleared too many deals that concentrate industries and harm consumers.
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