[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3267 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 3267
To reform the antitrust laws to better protect competition in the
American economy, to amend the Clayton Act to modify the standard for
an unlawful acquisition.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 18, 2021
Ms. Klobuchar (for herself, Mr. Blumenthal, Ms. Hirono, and Mr. Booker)
introduced the following bill; which was read twice and referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To reform the antitrust laws to better protect competition in the
American economy, to amend the Clayton Act to modify the standard for
an unlawful acquisition.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Consolidation Prevention and
Competition Promotion Act of 2021''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) competitive markets, in which multiple firms compete to
buy and sell products and services, are critical to ensuring
economic opportunity for all people in the United States and
providing resilience to the economy during unpredictable times;
(2) when companies compete, businesses offer the highest
quality and choice of goods and services for the lowest
possible prices to consumers and other businesses;
(3) competition fosters small business growth, reduces
economic inequality, and spurs innovation and job creation;
(4) in the United States economy today, the presence and
exercise of market power is substantial and growing;
(5) the presence and exercise of market power makes it more
difficult for people in the United States to start their own
businesses, depresses wages, and increases economic inequality,
with particularly damaging effects on historically
disadvantaged communities;
(6) market power and undue market concentration contribute
to the consolidation of political power, undermining the health
of democracy in the United States;
(7) the anticompetitive effects of monopoly power or buyer
market power include higher prices, lower quality, lessened
choice, reduced innovation, foreclosure of competitors, and
increased entry barriers;
(8) monopsony power or seller market power allows a firm to
force suppliers of goods or services to accept below market
prices or to force workers to accept below market wages,
resulting in lower quality products and services, reduced
opportunities for suppliers and workers, reduced availability
of products and services for consumers, reduced innovation,
foreclosure of competitors, and increased entry barriers;
(9) horizontal consolidation, vertical consolidation, and
conglomerate mergers all have potential to increase market
power and cause anticompetitive harm;
(10) extensive consolidation is reducing competition and
threatens to place the American dream further out of reach for
many consumers in the United States;
(11) since 2008, firms in the United States have engaged in
over $10,000,000,000,000 in mergers and acquisitions;
(12) the acquisition of nascent or potential rivals by
dominant firms can present significant long-term threats to
competition and innovation;
(13) the acquisition, by one of its competitors, of a
maverick firm that plays a disruptive role in the market--by
using an innovative business model or technology, offering
lower prices or new, different products or services products,
or by other means that benefit consumers--can present a threat
to competition;
(14) section 7 of the Clayton Act (15 U.S.C. 18), is the
primary line of defense against anticompetitive mergers; and
(15) in recent years, some court decisions and enforcement
policies have limited the vitality of the Clayton Act to
prevent harmful consolidation by--
(A) discounting previously accepted presumptions
that certain acquisitions are anticompetitive;
(B) focusing inordinately on the effect of an
acquisition on price in the short term, to the
exclusion of other potential anticompetitive effects;
(C) underestimating the dangers that horizontal,
vertical, and conglomerate mergers will lower quality,
reduce choice, impede innovation, exclude competitors,
increase entry barriers, or create buyer power,
including monopsony power; and
(D) requiring the government to prove harmful
effects of a proposed merger to a near certainty.
(b) Purposes.--The purposes of this Act are to--
(1) enhance competition throughout the American economy by
strengthening antitrust enforcement by the Department of
Justice, the Federal Trade Commission, the State enforcement
agencies, and private parties;
(2) revise the legal standard under section 7 of the
Clayton Act to better enable enforcers to arrest the likely
anticompetitive effects of harmful mergers in their incipiency,
as Congress intended, by clarifying that the potential effects
that may justify prohibiting a merger under the Clayton Act
include lower quality, reduced choice, reduced innovation, the
exclusion of competitors, or increased entry barriers, in
addition to increased price to buyers or reduced price to
sellers;
(3) amend the Clayton Act to clarify that an acquisition
that tends to create a monopsony violates the Clayton Act; and
(4) establish simple, cost-effective decision rules that
require the parties to certain acquisitions that either
significantly increase concentration or are extremely large
bear the burden of establishing that the acquisition will not
materially harm competition.
SEC. 3. DEFINITION.
In this Act the term ``antitrust laws''--
(1) has the meaning given the term in the first section of
the Clayton Act (15 U.S.C. 12); and
(2) includes--
(A) section 5 of the Federal Trade Commission Act
(15 U.S.C. 45) to the extent that such section applies
to unfair methods of competition; and
(B) this Act and the amendments made by this Act.
SEC. 4. UNLAWFUL ACQUISITIONS.
(a) Market Power.--Section 1(a) of the Clayton Act (15 U.S.C.
12(a)) is amended by adding at the end the following:
``the term `market power' in this Act means the ability of
a person, or a group of persons acting in concert, to
profitably impose terms or conditions on counterparties,
including terms regarding price, quantity, product or service
quality, or other terms affecting the value of consideration
exchanged in the transaction, that are more favorable to the
person or group of persons imposing them than what the person
or group of persons could obtain in a competitive market.''.
(b) Unlawful Acquisitions.--Section 7 of the Clayton Act (15 U.S.C.
18) is amended--
(1) in the first and second undesignated paragraphs, by
striking ``substantially to lessen'' each place that term
appears and inserting ``to create an appreciable risk of
materially lessening'';
(2) by inserting ``or a monopsony'' after ``monopoly'' each
place that term appears; and
(3) by adding at the end the following:
``In a case brought by the United States, the Federal Trade
Commission, or a State attorney general, a court shall determine that
the effect of an acquisition described in this section may be to create
an appreciable risk of materially lessening competition or to tend to
create a monopoly or a monopsony, in or affecting commerce, if--
``(1) the acquisition would lead to a significant increase
in market concentration in any relevant market;
``(2)(A) the acquiring person has a market share of greater
than 50 percent or otherwise has significant market power, as a
seller or a buyer, in any relevant market, and as a result of
the acquisition, the acquiring person would obtain control over
entities or assets that compete or have a reasonable
probability of competing with the acquiring person in the same
relevant market; or
``(B) as a result of the acquisition, the acquiring person
would obtain control over entities or assets that have a market
share of greater than 50 percent or otherwise have significant
market power, as a seller or a buyer, in any relevant market,
and the acquiring person competes or has a reasonable
probability of competing with the entities or assets over which
it would obtain control, as result of the acquisition, in the
same relevant market;
``(3) the acquisition would lead to the combination of
entities or assets that compete or have a reasonable
probability of competing in a relevant market, and either the
acquiring person or the entities or assets over which it would
obtain control prevents, limits, or disrupts coordinated
interaction among competitors in a relevant market or has a
reasonable probability of doing so;
``(4) the acquisition--
``(A) would likely enable the acquiring person to
unilaterally and profitably exercise market power or
materially increase its ability to do so; or
``(B) would materially increase the probability of
coordinated interaction among competitors in any
relevant market; or
``(5)(A) the acquisition is not a transaction that is
described in section 7A(c); and
``(B)(i) as a result of such acquisition, the acquiring
person would hold an aggregate total amount of the voting
securities and assets of the acquired person in excess of
$5,000,000,000 (as adjusted and published for each fiscal year
beginning after September 30, 2022, in the same manner as
provided in section 8(a)(5) to reflect the percentage change in
the gross national product for such fiscal year compared to the
gross national product for the year ending September 30, 2021);
or
``(ii)(I) the person acquiring or the person being acquired
has assets, net annual sales, or a market capitalization
greater than $100,000,000,000 (as so adjusted and published);
and
``(II) as a result of such acquisition, the acquiring
person would hold an aggregate total amount of the voting
securities and assets of the acquired person in excess of
$50,000,000 (as so adjusted and published),
unless the acquiring or acquired person establish, by a
preponderance of the evidence, that the effect of the
acquisition will not be to create an appreciable risk of
materially lessening competition or tend to create a monopoly
or a monopsony. In this paragraph, the term `materially' means
more than a de minimis amount.''.
SEC. 5. POST-SETTLEMENT DATA.
Section 7A of the Clayton Act (15 U.S.C. 18a) is amended by adding
at the end the following:
``(l)(1) Each person who enters into an agreement with the Federal
Trade Commission or the United States to resolve a proceeding brought
under the antitrust laws or under the Federal Trade Commission Act (15
U.S.C. 41 et seq.) regarding an acquisition with respect to which
notification is required under this section shall, on an annual basis
during the 5-year period beginning on the date on which the agreement
is entered into, submit to the Federal Trade Commission or the
Assistant Attorney General, as applicable, information sufficient for
the Federal Trade Commission or the United States, as applicable, to
assess the competitive impact of the acquisition, including--
``(A) the pricing, availability, and quality of any product
or service, or inputs thereto, in any market, that was covered
by the agreement;
``(B) the source, and the resulting magnitude and extent,
of any cost-saving efficiencies or any benefits to consumers or
trading partners that were claimed as a benefit of the
acquisition and the extent to which any cost savings were
passed on to consumers or trading partners; and
``(C) the effectiveness of any divestitures or any
conditions placed on the acquisition in fully restoring
competition.
``(2) The requirement to provide the information described in
paragraph (1) shall be included in an agreement described in that
paragraph.
``(3) The Federal Trade Commission, with the concurrence of the
Assistant Attorney General, by rule in accordance with section 553 of
title 5, United States Code, and consistent with the purposes of this
section--
``(A) shall require that the information described in
paragraph (1) be in such form and contain such documentary
material and information relevant to an acquisition as is
necessary and appropriate to enable the Federal Trade
Commission and the Assistant Attorney General to assess the
competitive impact of the acquisition under paragraph (1); and
``(B) may--
``(i) define the terms used in this subsection;
``(ii) exempt, from the requirements of this
section, information not relevant in assessing the
competitive impact of the acquisition under paragraph
(1); and
``(iii) prescribe such other rules as may be
necessary and appropriate to carry out the purposes of
this section.''.
SEC. 6. FEDERAL TRADE COMMISSION STUDY.
Not later than 2 years after the date of enactment of this Act, the
Federal Trade Commission, in consultation with the Securities and
Exchange Commission, shall conduct and publish a study, using any
compulsory process necessary, relying on public data and information if
available and sufficient, and incorporating public comment on--
(1) the extent to which an institutional investor or
related institutional investors have ownership or control
interests in competitors in moderately concentrated or
concentrated markets;
(2) the economic impacts of such overlapping ownership or
control; and
(3) the mechanisms by which an institutional investor could
affect competition among the companies in which it invests and
whether such mechanisms are prevalent.
SEC. 7. GAO STUDIES.
(a) In General.--Not later than 18 months after the date of
enactment of this Act, the Comptroller General of the United States
shall--
(1) conduct a study to assess the success of merger
remedies required by the Department of Justice or the Federal
Trade Commission in consent decrees entered into since 6 years
prior to the date of enactment of this Act, including the
impact on maintaining competition, a comparison of structural
and conduct remedies, and the viability of divested assets; and
(2) conduct a study on the impact of mergers and
acquisitions on wages, employment, innovation, and new business
formation.
(b) Update.--The Comptroller General of the United States shall--
(1) update the study under paragraph (1) 3 years and 6
years after the date of enactment of this Act based on the
information provided under section 7A(l) of the Clayton Act, as
added by section 5 of this Act; and
(2) identify specific remedies or alleged merger benefits
that require additional information or research.
SEC. 8. OFFICE OF COMPETITION ADVOCATE.
(a) Definitions.--In this section--
(1) the term ``agency'' has the meaning given the term in
section 551 of title 5, United States Code;
(2) the term ``covered company'' means any company that
has, at any time, been required to make a filing under section
7A of the Clayton Act (15 U.S.C. 18a);
(3) the term ``Office'' means the Office of the Competition
Advocate established under subsection (b);
(4) the term ``Chairman'' means the Chairman of the
Commission; and
(5) the term ``Commission'' means the Federal Trade
Commission.
(b) Establishment.--There is established within the Federal Trade
Commission the Office of the Competition Advocate.
(c) Competition Advocate.--
(1) In general.--The head of the Office shall be the
Competition Advocate, who shall--
(A) report directly to the Chairman; and
(B) be appointed by the Chairman, with the
concurrence of a majority of the Commission, including
at least 1 Commissioner who is not a member of the same
political party of the majority members of the
Commission, from among individuals having experience in
advocating for the promotion of competition.
(2) Compensation.--The annual rate of pay for the
Competition Advocate shall be equal to the highest rate of
annual pay for other senior executives who report to the
Chairman of the Commission.
(3) Limitation on service.--An individual who serves as the
Competition Advocate may not be employed by the Commission--
(A) during the 2-year period ending on the date of
appointment as Competition Advocate; or
(B) during the 5-year period beginning on the date
on which the person ceases to serve as the Competition
Advocate.
(d) Staff of Office.--The Competition Advocate, after consultation
with the Chairman of the Commission, shall retain or employ independent
counsel, research staff, and service staff, as the Competition Advocate
determines is necessary to carry out the functions, powers, and duties
of the Office.
(e) Duties and Powers.--The Competition Advocate shall--
(1) recommend processes or procedures that will allow the
Federal Trade Commission and the Antitrust Division of the
Department of Justice to improve the ability of each agency to
solicit reports from consumers, small businesses, and employees
about possible anticompetitive practices or adverse effects of
concentration;
(2) publicly provide recommendations to other Federal
agencies about administrative actions that may have
anticompetitive effects and the potential harm to competition
if those actions are carried out;
(3) provide recommendations to other Federal agencies about
administrative actions that may have procompetitive effects and
the potential benefit to competition if those actions are
carried out;
(4) publish periodic reports on--
(A) market competition and its impact on the United
States, local geographic areas, and different
demographic and socioeconomic groups; and
(B) the success of remedies required by the
Department of Justice or the Federal Trade Commission
in consent decrees;
(5) collect data regarding concentration levels across
industries and the impact and degree of antitrust enforcement;
and
(6) standardize the types and formats of data reported and
collected.
(f) Subpoena Authority.--
(1) In general.--The Competition Advocate may either
require the submission of or accept voluntary submissions of
periodic and other reports from any covered company for the
purpose of assessing competition and its impact on the United
States, local geographic areas, and different demographic and
socioeconomic groups.
(2) Written finding.--Before issuing a subpoena to collect
the information described in paragraph (1), the Competition
Advocate shall make a written finding that--
(A) the data is required to carry out the functions
of the Competition Advocate; and
(B) the information is not available from a public
source or another agency.
(3) Mitigation of report burden.--Before requiring the
submission of a report from any company required to make a
filing under section 7A of the Clayton Act (15 U.S.C. 18a), the
Competition Advocate shall--
(A) coordinate with other agencies or authority;
and
(B) whenever possible, rely on information
available from such agencies or authority.
(g) Data Center.--
(1) Establishment.--There is established within the Office
the Data Center.
(2) Duties.--The Data Center shall--
(A) collect, validate, and maintain data obtained
from agencies, as defined in section 551 of title 5,
United States Code, commercial data providers, publicly
available data sources, and any covered company; and
(B) prepare and publish, in a manner that is easily
accessible to the public--
(i) a concentration database;
(ii) a merger enforcement database;
(iii) any other database that the
Competition Advocate determines is necessary to
carry out the duties of the Office; and
(iv) the format and standards for Office
data, including standards for reporting
financial transaction and position data to the
Office.
(3) Regulations.--The Competition Advocate shall promulgate
regulations relating to the collection and standardizing of
data under paragraph (2).
(4) Confidentiality.--
(A) In general.--The Data Center may not disclose
any confidential data collected under paragraph (2).
(B) Requirements.--Data obtained from an agency
shall be subject to the same confidentiality
requirements and protection as the agency providing the
data.
(C) Information security.--The Competition Advocate
shall ensure that data collected and maintained by the
Data Center are kept secure and protected against
unauthorized disclosure.
(h) Division of Market Analysis.--
(1) Establishment.--There is established within the Office
the Division of Market Analysis.
(2) Leadership.--The head of the Division of Market
Analysis shall be the Director of Market Analysis, who shall--
(A) report directly to the Competition Advocate;
and
(B) be appointed by the Competition Advocate, with
the concurrence of a majority of the Commission,
including at least one Commissioner who is not a member
of the same political party of the majority members of
the Commission.
(3) Division staff.--The Division of Market Analysis shall
retain or employ independent legal, economic, research, and
service staff sufficient to carry out the functions, powers,
and duties of the Division.
(4) Duties and powers.--The Division of Market Analysis--
(A) shall, at the direction of the Competition
Advocate or the Commission, conduct 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, and
shall publish reports on the results of such
investigations;
(B) shall, at the direction of the Competition
Advocate or the Commission, conduct investigations
concerning the competitive effects of acquisitions that
have been consummated no less than 2 years prior to the
start of the investigation, which shall include
recommendations concerning appropriate enforcement
action to remedy any anticompetitive effects discovered
and may include assessments of--
(i) the conditions of the relevant markets
affected by the acquisition, over the period
since the acquisition was consummated,
including, but not limited to, the potential
impact that the acquisition has had on--
(I) the prices of goods or
services, including wages in any
affected labor markets;
(II) the output and quality of
goods and services;
(III) the entry or exit of
competitors;
(IV) innovation;
(V) consumer choice and product
variety;
(VI) the opportunity of suppliers
and works to sell their product or
services;
(VII) coordinated interaction
between competitors; and
(VIII) subsequent mergers and
acquisitions activity;
(ii) whether the acquiring person or its
successors in interest--
(I) complied with all obligations
under any agreement with the Federal
Trade Commission, the United States, or
State law enforcement authorities to
resolve a proceeding brought under the
antitrust laws; and
(II) achieved measurable,
transaction-specific efficiencies,
which did not arise from
anticompetitive reductions of output,
as a result of the acquisition; and
(iii) whether any agreements with the
Federal Trade Commission or the United States
to resolve a proceeding brought under the
antitrust laws regarding the acquisition was
effective in mitigating the anticompetitive
effects from the acquisition;
(C) shall rely on public data and information,
public comment, information from other Federal
agencies, information from the Data Center, information
obtained pursuant to the Competition Advocate's
subpoena authority under subsection (f) of this section
and may use compulsory process under section 6(b) of
the Federal Trade Commission Act (15 U.S.C. 46(b)) as
necessary to carry out the functions set forth in
subsections (h)(3)(A) and (h)(3)(B) of this section;
and
(D) shall report any evidence it obtains that any
person, partnership, or corporation has engaged in
transactions or conduct that may constitute of a
violation of the antitrust law to the Commission, which
may institute further investigation, initiate
enforcement proceedings, or refer such evidence to the
Attorney General.
SEC. 9. MARKET DEFINITION.
(a) In General.--Establishing liability under the antitrust laws
does not require the definition of a relevant market, except when the
definition of a relevant market is required, to establish a presumption
or to resolve a claim, under a statutory provision that explicitly
references the terms ``relevant market'', ``market concentration'', or
``market share''. Statutory references to the term ``line of commerce''
shall not constitute an exception to the foregoing rule that
establishing liability under the antitrust laws does not require the
definition of a relevant market.
(b) Direct Evidence.--If direct evidence in the record is
sufficient to prove actual or likely harm to competition, an
appreciable risk to competition sufficient to satisfy the applicable
statutory standard, or that the effect of an acquisition subject to
section 7 of the Clayton Act (15 U.S.C. 18) may be to create an
appreciable risk of materially lessening competition or to tend to
create a monopoly or a monopsony, neither a court nor the Federal Trade
Commission shall require definition of a relevant market in order to
evaluate the evidence, to find liability, or to find that a claim has
been stated under the antitrust laws.
(c) Rule of Construction.--Nothing in this section may be construed
to prevent a court or the Federal Trade Commission from considering
evidence relating to the definition of proposed relevant markets to
evaluate the merits of a claim under the antitrust laws.
SEC. 10. ADDITIONAL REMEDIES; RULES OF CONSTRUCTION.
(a) Additional Remedies.--The rights and remedies provided under
this Act are in addition to, not in lieu of, any other rights and
remedies provided by Federal law, including under section 4, 4A, 15, or
16 of the Clayton Act (15 U.S.C. 15, 15a, 25, 26) or section 13(b) of
the Federal Trade Commission Act (15 U.S.C. 53(b)).
(b) Rules of Construction.--Nothing in this Act may be construed
to--
(1) impair or limit the applicability of any of the
antitrust laws; and
(2) prohibit any other remedy provided by Federal law.
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