By: Bryan Cave Leighton & Paisner
2021 has been a busy year for antitrust legislation. On February 4, 2021, Senator Amy Klobuchar (D-MN) and four other senators introduced the Competition and Antitrust Law Enforcement Act of 2021 (“Klobuchar Bill”).1 On April 19, 2021, Senator Josh Hawley (R-MO) unveiled the Trust-Busting for the Twenty-First Century Act (“Hawley Bill”).2 And, on June 14, 2021, Senators Mike Lee (R-UT) and Chuck Grassley (R-IA) introduced the Tougher Enforcement Against Monopolies Act (“TEAM Act”).3 In addition to the Senate bills discussed below, the House of Representatives introduced five bills on June 11, 2021 that largely cover the same ground as the Klobuchar and Hawley bills.4 Collectively, the focus of all this activity is large technology companies.
All three bills amend the Clayton Act to (1) relax the standards to determine whether an acquisition is anticompetitive; (2) restrict mergers by “extremely large” companies; and (3) enhance the antitrust enforcement powers of both private plaintiffs and the federal government.
Ban on Mergers by Extremely Large Companies
All three bills would place restrictions on mergers by large companies. In the Klobuchar Bill, acquisitions of $50 million or more of the securities or assets of another company by “extremely large” companies5 would be presumed to be anticompetitive. The “extremely large” acquiring company would bear the burden of rebutting the presumption of anticompetitive harm by demonstrating that the acquisition will not materially harm competition.
The Hawley Bill goes a step further by banning extremely large companies6 from acquiring, “directly or indirectly,” the stock or assets, no matter how small, of any persons where the effect of the acquisition “may be to lessen competition in any way.” In addition, the bill gives the FTC enhanced enforcement authority over “dominant digital firms” (i.e. Big Tech). A “dominant digital firm” is an entity that (1) “provides a website or service accessible through the internet; and (2) possesses dominant market power in any market related to that website or service.” If the FTC designates a platform as a “dominant digital firm,” the entity would be banned from any merger in excess of just $1 million. Any “dominant digital firm” would also be banned from using “search functionality”—any website feature designed to rank or list search results—to favor their own results…