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Experts torn on impact of antitrust bills passed by House

The three antitrust bills passed by the U.S. House of Representatives would funnel more money to antitrust law enforcers, as well as add to enforcement processes.

Three antitrust bills were recently passed by the U.S. House. In contrast to other antitrust reform bills introduced in Congress, the bills make technical changes to antitrust processes, but don't deliver the big reforms some lawmakers want.

The bills would increase funding to antitrust law enforcement agencies, give state attorneys general more leeway for going after big tech and require businesses to disclose additional information when filing for mergers. Though the bills have bipartisan support, they don't come close to the changes some policymakers are calling for.

Sen. Amy Klobuchar (D-Minn.) introduced the American Innovation and Choice Online Act last year that would prohibit companies like Google and Amazon from favoring their own products on online marketplaces, a proposal that goes much further than the three House bills. Rep. David Cicilline (D-R.I.), chairman of the House Subcommittee on Antitrust, Commercial and Administrative Law, along with ranking member Rep. Ken Buck (R-Colo.) sponsored a similar bill, which passed out of the House Judiciary Committee last year, but has yet to get a House vote.

The efforts by Klobuchar in the Senate and Cicilline and Buck in the House likely won't make it any further because changing antitrust law is controversial, said George Hay, antitrust law expert and professor of law and economics at Cornell Law School. In addition, Congress has limited time left in 2022 to take action on the antitrust reform bills. Even the three bills passed by the House still need to pass the Senate before being signed into law.

If Democrats lose control of the House in the upcoming elections, "none of the reform packages have any chance at all," Hay said. Even if Democrats maintain control of the House, he said, there are concerns that antitrust reform bills such as Klobuchar's American Innovation and Choice Online Act go too far, which will likely slow its advancement.

Despite their limited changes, Buck maintained in a news release that the three House bills are "a major first step towards restoring competition and protecting American small businesses from the monopolistic conduct of Big Tech."

The following are the three bills, which are designed to work together:

  1. Merger Filing Fee Modernization Act. Updates merger filing fees for the first time in 20 years, which would funnel more money to the Federal Trade Commission and Department of Justice. The bill reduces filing fees for small and medium-sized companies, but increases the fees for large companies because their proposed mergers typically require more in-depth reviews.
  2. State Antitrust Enforcement Venue Act. Exempts antitrust actions brought by states from consolidation with private cases -- an exemption that only applies to cases brought by the federal government under existing law. This potentially allows states to step in and bring more antitrust cases.
  3. Foreign Merger Subsidy Disclosure Act. Requires companies to disclose any subsidies they might have received from other countries posing economic risks to the U.S., such as China, during the pre-merger notification process. This gives antitrust enforcers more information to assess competitive consequences of mergers and transactions influenced by such countries.

Ultimate impact of bills questioned

The three House bills do not cause significant change when it comes to how antitrust enforcement agencies pursue and litigate cases against big companies' anti-competitive conduct, minimizing their effect on antitrust reform, Hay said.

"I don't think any of them are going to have that much impact," he said.

While additional funding for antitrust enforcers through the Merger Filing Fee Modernization Act is "fair," Hay said, the most standout bill of the three is the State Antitrust Enforcement Venue Act. Yet the bill only applies to discovery -- the legal process during which parties in a case request information from each other.

"States are concerned that if they file an antitrust case and then there are a lot of private follow-on cases, that will slow everything down because all those cases will have to be consolidated," Hay said. "They want what the federal government got several years ago -- for the purposes of discovery, the case is not going to be consolidated with other cases."

Hay said it's unclear what additional information the Foreign Merger Subsidy Disclosure Act would force companies to disclose, and he questions its impact. He said companies already reveal large amounts of information about their business when filing for a merger.

Merger Filing Fee Modernization Act gets thumbs-up

Merger filing fees represent an important funding source for antitrust enforcement agencies, meaning that updating those fees would provide the agencies with much-needed additional resources for more vigorous antitrust law enforcement, said Diana Moss, president of the American Antitrust Institute.

This bolsters and supports the agencies' ability to do more thorough first looks.
Diana MossPresident, American Antitrust Institute

"This bolsters and supports the agencies' ability to do more thorough first looks through the second request process -- to move those cases that raise competition concerns to the investigatory process and all the way through to the resolution of those cases, whether it's going to federal court to litigate them or hammer out settlement agreements," she said.

In addition, the Merger Filing Fee Modernization Act creates three new categories for merger deals over $1 billion, which Moss applauded as a "great development."

Merger deals over $1 billion tend to face more challenges on anti-competitive grounds, but they also tend to be deals that reach settlement rather than being resolved through other enforcement means such as litigation, according to an analysis paper by Moss.

Lumping all $1 billion-plus deals into one category "masks important information about how enforcement levels and trends potentially vary by different sizes of billion-dollar mergers," Moss noted in her analysis paper. Under existing law, all deals over $1 billion are included in a single category, while deals under $1 billion fall into multiple categories.

"It's long overdue to have those categories," Moss said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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