Wednesday, October 28, 2020
Below I have pulled the language from the House Judiciary Committee report on the non-tech recommendations. Unlike the BigTech part of the report, which was largely consistent with the various hearings, many of these recommendations are not at all related to BigTech at all and many advocate for a significant departure from antitrust as it has been understood for at least a generation. The business press seems to have almost totally ignored this part of the report.
Bill Kovacic and I are hosting virtual workshop tomorrow with some leading practitioners (including a former federal judge) to discuss these issues.
We have a great cast of panelists.
The House Judiciary Report – Implications Beyond BigTech
Sponsored by the University of Florida Levin College of Law, the University of Florida Competition Policy Initiative, and the George Washington Law School Competition Law Center.
Hon. Katherine Forrest (frm.) – Cravath, Swain & Moore, LLP
Eric Grannon – White & Case, LLP
William Kovacic – George Washington University Law School
Belinda Lee – Latham & Watkins, LLP
D. Daniel Sokol – University of Florida Levin College of Law
Oct 29, 2020 12:00 PM in Eastern Time (US and Canada)
I copy and paste from the report.
- Codifying bright-line rules for merger enforcement, including structural presumptions. Under a structural presumption, mergers resulting in a single firm controlling an outsized market share, or resulting in a significant increase in concentration, would be presumptively prohibited under Section 7 of the Clayton Act.
- Strengthening the Clayton Act to prohibit acquisitions of potential rivals and nascent competitors
- a presumption that vertical mergers are anticompetitive when either of the merging parties is a dominant firm operating in a concentrated market, or presumptions relating to input foreclosure and customer foreclosure.
- extending the Sherman Act to prohibit abuses of dominance (whatever that means).
- creation of a statutory presumption that a market share of 30% or more constitutes a rebuttable presumption of dominance by a seller, and a market share of 25% or more constitute a rebuttable presumption of dominance by a buyer.
- overriding the legal requirement that monopoly leveraging “actually monopolize” the second market, as set out in Spectrum Sports, Inc. v. McQuillan.
- proof of recoupment is not necessary to prove predatory pricing or predatory buying, overriding the Supreme Court’s decisions in Matsushita v. Zenith Ratio Corp., Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., and Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co.
- overriding judicial decisions that have treated unfavorably essential facilities- and refusal to deal-based theories of harm
- conditioning access to a product or service in which a firm has market power to the purchase or use of a separate product or service is anticompetitive under Section 2, as held by the Supreme Court in Jefferson Parish Hosp. Dist. v. Hyde
- making a design change that excludes competitors or otherwise undermines competition should be a violation of Section 2, regardless of whether the design change can be justified as an improvement for consumers
- Overriding Ohio v. American Express by clarifying that cases involving platforms do not require plaintiffs to establish harm to both sets of customers
- Overriding United States v. Sabre Corp., clarifying that platforms that are “two-sided,” or serve multiple sets of customers, can compete with firms that are “one-sided”
- Clarifying that market definition is not required for proving an antitrust violation, especially in the presence of direct evidence of market power
- Clarifying that “false positives”—or erroneous enforcement—are not more costly than “false negatives”—or erroneous non-enforcement—and that, in relation to conduct or mergers involving dominant firms, “false negatives” are costlier.
- Eliminating court-created standards for “antitrust injury” and “antitrust standing,” which undermine Congress’s grant of enforcement authority to “any person . . . injured . . . by reason of anything forbidden in the antitrust laws;”
- Reducing procedural obstacles to litigation, including through eliminating forced arbitration clauses and undue limits on class action formation
- Lowering the heightened pleading requirement introduced in Bell Atlantic Corp. v. Twombly