House Antitrust Report: The Next Bell Breakup or Empty Rhetoric?

By: Kolton Whitmire

Earlier this month, the House Antitrust, Commercial, and Administrative Law Subcommittee of the House Judiciary Committee released its “Investigation of Competition in Digital Markets” (hereinafter “the Report”), which began in June of last year,[1] causing quite the stir.[2] The Report made a laundry list of recommendations to combat what it viewed as anticompetitive and gatekeeping behaviors of four major tech giants: Amazon, Apple, Google, and Facebook.[3] One of those recommendations was born out of the Report’s observations that the Supreme Court, as well as the Department of Justice and Federal Trade Commission, had adopted very narrow views of pre-merger approval authority under the Hart-Scott-Rodino Act.[4] The Report also recommends crafting statutory language to overturn a multitude of Supreme Court cases to strengthen what the committee views as inadequate judicial protection against monopolistic behavior.[5] If this were not enough to give businesses pause, the Report also suggests removing barriers to private enforcement such as “unduly high pleading standards” and more strictly regulating contractual terms such as arbitration clauses and class action limitations.[6]

While all the Report’s recommendations are unlikely to be implemented, some forward momentum appears inevitable. Chairman of the subcommittee on antitrust David Cicilline already signaled his intentions to introduce legislation based on the Report at the start of the next legislative session in January.[7] And while some of the Report’s recommendations are more likely to be implemented should Democrats take the White House and both houses of Congress, at least some progress can be expected on a bipartisan basis in light of the Republican-led and supported antitrust lawsuit against Google.[8]

The Report’s most specific recommendations include overturning Supreme Court interpretations viewed as barriers to private actions as well as agency enforcement. In the Report’s crosshairs are a line of cases specifying that “recoupment” is a necessary showing to prove predatory pricing beginning with Matsushita v. Zenith Ratio Corp.[9] The Report notes that successful antitrust lawsuits have severely declined since the introduction of the recoupment element in antitrust cases.[10] Businesses evaluating their antitrust exposure as shielded by a lack of evidence of recoupment may need to seek shelter amongst other defenses. 

Another line of cases concerning “monopoly leveraging” beginning with Spectrum Sports, Inc. v. McQuillan,[11]effectively requiring plaintiffs to show actual or dangerous probability of monopolization of a sufficiently defined secondary market,[12] is finding itself on the chopping block of the Report.[13] This change could drastically expand the exposure of companies to antitrust suits and open the door to more plaintiffs who can show an injury to a market without the injury amounting to a true or imminently approaching monopoly, and further removes the need for plaintiffs to particularly define the market being harmed.

Another significant change recommended by the Report would be returning to the interpretation of Jefferson Parish Hosp. Dist. v. Hyde,[14] where the Court took note of some “tying” behaviors (conditioning the purchase of one product on the simultaneous purchase of a separate “tied” product) which were per se unreasonable if anticompetitive consequences were sufficiently probable to result from the “tying.”[15] Lower courts have since gravitated towards the more flexible “rule of reason” test,[16] but the Report would have the courts return to implementing the per se rule when appropriate.

The Report notes other proposals it believes Congress should review because antitrust experts suggested them to the committee.[17] One of those recommendations concerns Ohio v. American Express,[18] which experts would have overturned insofar as the case forced the plaintiffs to show that both merchants and customers are be harmed by an anti-steering policy which prohibited merchants from discouraging use of American Express cards. Experts would find it sufficient that plaintiffs show only customers are harmed by such a practice.

Companies relying on the above cases and their progeny should reevaluate and look for other potential defenses to antitrust claims. The theme in the recommendations is clear: lessen the burden on antitrust plaintiffs. Some companies may welcome such a change, others not so much. But overriding the above cases are just the Report’s most specific and emphatic recommendations, and consequently most likely to be included in Representative Cicilline’s legislation come January. The Report’s other suggestions may be less specific and merely call on Congress to reevaluate statutes and administrative agency interpretations, but they too could be subject to change come January. So not only should businesses review their exposure for past behavior in their market, they may need to proactively consider the attention their future mergers and acquisitions may garner should the Department of Justice and the Federal Trade Commission be directed to exercise broader approval authority.


[1] See Majority Staff of H. Subcomm. on Antitrust, Commercial, and Admin. Law of the Comm. on the Judiciary, 116thCong., Investigation of Competition in the Digital Marketplace, [hereinafter The Report], https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf (Comm. Print 2020).

[2] See generally David McLaughlin, Did Big Tech Get Too Big? U.S. Crackdown Seeks Answer, Wash. Post (Oct. 18, 2020), https://www.washingtonpost.com/business/did-big-tech-get-too-big-us-crackdown-seeks-answer/2020/10/16/db8153f6-0fe8-11eb-b404-8d1e675ec701_story.html; Mark MacCarthy, The House antitrust report is a major step toward reining in Big Tech, Brookings Institute (Oct. 20, 2020), https://www.brookings.edu/blog/techtank/2020/10/20/the-house-antitrust-report-is-a-major-step-toward-reining-in-big-tech/; Adi Robertson, Congress releases blockbuster tech antitrust report, The Verge (Oct. 6, 2020), https://www.theverge.com/2020/10/6/21504814/congress-antitrust-report-house-judiciary-committee-apple-google-amazon-facebook.

[3] See id. at 19-21.

[4] See id. at 390-91; see also Steven Cernak, House Antitrust Report Takes on Big Tech and Classic Antitrust Opinions, Lawyer Monthly (Oct. 21, 2020), https://www.lawyer-monthly.com/2020/10/house-antitrust-report-takes-on-big-tech-and-classic-antitrust-opinions/ (noting that DOJ and FTC rarely used their authorities under the Act).

[5] See The Report, supra note 1, at 396-99 (listing the targeted decisions and reasons for needing to be overridden or clarified).

[6] See id. at 21 (calling for reforms which would strengthen antitrust enforcement).

[7] See McLaughlin, supra note 2.

[8] See Tony Room, Justice Department sues Google, alleging multiple violations of federal antitrust law, Wash. Post (Oct. 20, 2020), https://www.washingtonpost.com/technology/2020/10/20/google-antitrust-doj-lawsuit/ (describing the lawsuit as a “search and advertising empire” that violates antitrust law).

[9] 475 U.S. 574 (1986) (American television manufacturers unable to succeed in antitrust lawsuit against Japanese manufacturer because they could not present evidence of rising prices after cornering the market with below cost prices)

[10] See The Report, supra note 1 at 397.

[11] 506 U.S. 447 (1993) (horseshoe pad manufacturers driven out of business by the sole producers of a patented elastic polymer called “sorbothane”); see also Alaska Airlines, Inc. v. United Airlines, Inc., 948 F.2d 536 (9th Cir. 1991) (finding that United Airlines and American Airlines did not violate the Sherman Act because they did not hold the power to fully eliminate competition).

[12] 506 U.S. 447, 459 (1993).

[13] See The Report, supra note 1, at 396.

[14] McQuillan, 466 U.S. 2 (1984) (contract between anesthesiologist firm and hospital required all anesthesiology work be performed by the firms employees did not violate the Sherman Act because it did not actually unreasonable restrain the market).

[15] Id. at 15-16.

[16] Federal Trade Commission, https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/tying-sale-two-products (last visited Nov. 1, 2020).

[17] See The Report, supra note 1, at 399.

[18] 138 S.Ct 2274 (2018).

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