U.S. Senate focused on antitrust in digital markets with new legislative proposals

Recent proposals by the new Democratic leadership of the Senate for reform of U.S. antitrust enforcement could have a significant impact on digital markets: enabling regulators to effectively target a much broader range of conduct with greater impact on Big Tech.

In our latest LinkingCompetition blog post, we look at an omnibus bill introduced by Senator Amy Klobuchar for the majority of the Antitrust Subcommittee. The bill proposes significant legislative changes that would reduce legal enforcement standards, stiffen potential penalties and increase funding and incentives for enforcement. While the proposals cut across sectors, several aspects are targeted to digital markets consistent with the themes we are seeing globally (read more in our Tech Legal Outlook 2021):

Acquisitions of nascent competitors

• The bill would reduce legal standards for enforcers to prove in court that acquisitions are anticompetitive. 
• It would also create a presumption that an acquisition of a nascent competitor by a dominant firm would be anticompetitive. 
• This proposal would substantially recalibrate the risk / cost balance for tech transactions, particularly acquisitions of start-ups and companies active in related markets.

Exclusionary conduct

• The bill would expressly prohibit exclusionary conduct by any firm that “materially disadvantages competitors or limits their opportunity to compete.” 
• This would allow for enforcement wherever the conduct creates an “appreciable risk of harming competition” without a need to show actual harm to competition. 
• The bill would create a rebuttable presumption that exclusionary conduct by a dominant firm is anticompetitive. Building on the concept of platforms as gatekeepers, this would dramatically expand the obligations of technology platforms to cooperate with competitors.

The ultimate result of this bill and expected future legislation targeted at competition digital markets remains to be seen. Sweeping changes will face significant headwinds and likely will need to be moderated to gain bi-partisan support. Still, the change in the balance of power in Congress will give this bill significantly more traction than prior attempts.