By: Neli Traykova
On February 4, 2021, Senator Amy Klobuchar (D-Minn.) introduced, what is regarded as, a much-needed reform to current antitrust laws, primarily the Clayton Act. As the chair of the Senate’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Senator Klobuchar sponsored the Competition and Antitrust Law Enforcement Reform Act of 2021. The Act aims to restore competition amongst U.S. businesses and strengthen antitrust laws in order to better protect consumers, workers, and the future of the U.S. economy.
Restoring competition is of extreme importance because competitive markets create economic opportunities by pushing companies to provide the best value for consumers. Often, larger mergers and acquisitions lead to monopolies that stiffen the economic growth and result in higher prices and lower quality of goods and services. The proposed Act further aims to keep innovation alive. By restoring competition, companies and individuals are pushed to think outside of the box and create and invent new products.
Currently, the Clayton Antitrust Act of 1914, otherwise known as the Clayton Act, is the leading legislation governing anti-competitive mergers and acquisitions. The often cited Section 7 of the Clayton Act prohibits mergers and acquisitions where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” The proposed legislation would amend Section 7 of the Clayton Act to prevent mergers that “create an appreciable risk of materially lessening competition,” thus broadening the scope of the Act by prohibiting potential mergers that do not reach the “substantial” threshold under the current law.
Beyond the broader language, the newly proposed legislation reaches even further by applying not only to monopoly but also monopsony power. Including monopsonies in unlawful acquisitions is a large stride towards restoring competition as monopsonists have great power to influence the markets through price control and monopsonies are not currently regulated under the Clayton Act.
The proposed legislation by Senator Klobuchar comes after a year of landmark antitrust lawsuits and a bipartisan push for enforcement actions capable of controlling the dominance of large corporations. Technology giants, Facebook and Google, are currently fighting major battles over anti-competitive practices addressed in the proposed legislation. The Federal Trade Commission sued Facebook in December 2020 alleging that Facebook has become a social networking monopoly and the purchase of Instagram and WhatsApp are anticompetitive acquisitions. Similarly, in October, 2020, the U.S. Department of Justice sued Google for anticompetitive practices alleging that Google is maintaining monopolies in the search engine market.
Legislation such as the proposed Competition and Antitrust Law Enforcement Reform Act would greatly alter antitrust law as we know it and have an unprecedented impact on the future of U.S. businesses. The Act would put a great burden on corporations and businesses to prove that their merger and acquisition deals, if valued over $5 billion, do not lessen competition or increase concentration. Thus, if the Act is passed, the future of deals made by large corporations and tech giants will be jeopardized by the higher level of scrutiny proposed by Senator Klobuchar.
 See Matthew Perlman, Klobuchar Unveils Sweeping Antitrust Reform Bill, Law360 (Feb. 4, 2021), https://www-law360-com.proxywcl.wrlc.org/competition/articles/1352222/klobuchar-unveils-sweeping-antitrust-reform-bill.
 S. 225, 117th Cong. § 2 (2021).
 Perlman, supra note 1.
 See Fed. Trade Comm’n, FTC Fact Sheet: How Competition Works, https://www.consumer.ftc.gov/sites/default/files/games/off-site/youarehere/pages/pdf/FTC-Competition_How-Comp-Works.pdf (discussing the benefits of a competitive market).
 See S. 225, 117th Cong. § 2 (2021) (outlining the findings and purpose of the proposed legislation).
 See Fed. Trade Comm’n, supra note 4 (discussing how competition boosts innovation).
 See 15 U.S.C. § 12–27; see also Fed. Trade Comm’n, The Antitrust Laws, https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws.
 See 15 U.S.C. § 18.
 See S. 225, 117th Cong. 1, 10 (2021) (outlining the proposed changes regarding unlawful acquisitions).
 Id. at 3 (defining monopsony power).
 Perlman, supra note 1.
 See Press Release, Fed. Trade Comm’n, FTC Sues Facebook for Illegal Monopolization (Dec. 9, 2020), https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization (describing in further detail the FTC’s allegations against Facebook).
 See Justice Department Sues Monopolist Google for Violating Antitrust Laws, Justice News (Oct. 20, 2020), https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-violating-antitrust-laws (describing the complaint).
 See generally S. 225, 117th Cong. § 4 (2021).