Sec. 2. Findings and purposes
1,133 words·~5 min read·
/bill/118/s/4308/is/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Congress finds that— competitive markets, in which multiple firms compete to buy and sell products and services, are critical to ensuring economic opportunity for all people in the United States and providing resilience to the economy during unpredictable times; when companies compete, businesses offer the highest quality and choice of goods and services for the lowest possible prices to consumers and other businesses; competition fosters small business growth, reduces economic inequality, and spurs innovation and job creation; competitive markets are crucial for the United States global economic competitiveness and national security; in the United States economy today, the presence and exercise of market power is substantial and growing; the presence and exercise of market power makes it more difficult for people in the United States to start their own businesses, depresses wages, and increases economic inequality, with particularly damaging effects on historically disadvantaged communities; market power and undue market concentration contribute to the consolidation of political power, undermining the health of democracy in the United States; the anticompetitive effects of monopoly power or buyer market power include higher prices, lower quality, lessened choice, reduced innovation, foreclosure of competitors, and increased entry barriers; monopsony power or seller market power allows a firm to force suppliers of goods or services to accept below market prices or to force workers to accept below market wages, resulting in lower quality products and services, reduced opportunities for suppliers and workers, reduced availability of products and services for consumers, reduced innovation, foreclosure of competitors, and increased entry barriers; horizontal consolidation, vertical consolidation, and conglomerate mergers all have the potential to increase market power and cause anticompetitive harm; extensive consolidation is reducing competition and threatens to place the American dream further out of reach for many consumers in the United States; since 2008, firms in the United States have engaged in over $10,000,000,000,000 in mergers and acquisitions; the acquisition of nascent or potential rivals by dominant firms can present significant long-term threats to competition and innovation and harm the global economic competitiveness of the United States; the acquisition, by one of its competitors, of a maverick firm that plays a disruptive role in the market, by using an innovative business model or technology, offering lower prices or new, different products or services products, or by other means that benefit consumers, often presents a threat to competition; section 7 of the Clayton Act ( 15 U.S.C. 18 ) is the primary line of defense against anticompetitive mergers; in recent years, some court decisions and enforcement policies have limited the vitality of the Clayton Act to prevent harmful consolidation by— discounting previously accepted presumptions that certain acquisitions are anticompetitive; focusing inordinately on the effect of an acquisition on price in the short term, to the exclusion of other potential anticompetitive effects; underestimating the dangers that horizontal, vertical, and conglomerate mergers will lower quality, reduce choice, impede innovation, exclude competitors, increase entry barriers, or create buyer power, including monopsony power; failing to properly account for direct evidence of competitive harm, including intent evidence; and requiring the government to prove harmful effects of a proposed merger to a near certainty; anticompetitive exclusionary conduct constitutes a particularly harmful exercise of market power and a substantial threat to the United States economy; when dominant sellers exercise market power, they harm buyers by overcharging them, reducing product or service quality, limiting their choices, and impairing innovation; when dominant buyers exercise market power, they harm suppliers by underpaying them, limiting their business opportunities, and impairing innovation; when dominant employers exercise market power, they harm workers by paying them low wages, reducing their benefits, and limiting their future employment opportunities; nascent or potential rivals, even those that are unprofitable or inefficient, are an important source of competitive discipline for dominant firms; antitrust enforcement against anticompetitive exclusionary conduct has been impeded when courts have declined to rigorously examine the facts in favor of relying on inaccurate economic assumptions that are inconsistent with contemporary economic learning, such as presuming that market power is not durable and can be expected to self-correct, that monopolies can drive as much or more innovation than a competitive market, that above-cost pricing cannot harm competition, and other flawed assumptions; the courts of the United States have improperly implied immunity from the antitrust laws based on Federal regulatory statutes, even limiting the application of statutory antitrust savings clauses passed by Congress; the civil remedies currently available to cure violations of the Sherman Antitrust Act, including injunctions, equitable monetary relief, and private damages, have not proven sufficient, on their own, to deter anticompetitive conduct; in some cases, effective deterrence requires the imposition of civil penalties, alone or in combination with existing remedies, including structural relief, behavioral relief, private damages, and equitable monetary relief, including disgorgement and restitution; and Federal antitrust enforcement budgets have failed to keep pace with the growth of the economy and increasing demands on agency resources, significantly undermining the ability of the Federal antitrust agencies to fulfill their law enforcement missions and contributing to the rise of market power in the American economy.
The purposes of this Act are to— enhance competition throughout the American economy by strengthening antitrust enforcement by the Department of Justice, the Federal Trade Commission, the State enforcement agencies, and private parties; revise the legal standard under section 7 of the Clayton Act to better enable enforcers to arrest the likely anticompetitive effects of harmful mergers in their incipiency, as Congress intended, by clarifying that the potential effects that may justify prohibiting a merger under the Clayton Act include lower quality, reduced choice, reduced innovation, the exclusion of competitors, or increased entry barriers, in addition to increased price to buyers or reduced price to sellers; amend the Clayton Act to clarify that an acquisition that tends to create a monopsony violates the Clayton Act; establish simple, cost-effective decision rules that require the parties to certain acquisitions that either significantly increase concentration or are extremely large bear the burden of establishing that the acquisition will not materially harm competition; prohibit and deter exclusionary conduct that harms competition, particularly by dominant firms; enable the Department of Justice and the Federal Trade Commission to seek civil monetary penalties, in addition to existing remedies, for violations of the Sherman Act; give the Department of Justice and the Federal Trade Commission additional financial resources and enforcement tools to craft remedies for individual violations that are effective to deter future unlawful conduct and proportionate to the gravity of the violation; provide further protections for those who provide evidence of anticompetitive conduct to government enforcers and potential financial rewards for whistleblowers who provide information to the government that leads to a criminal fine; and grant successful antitrust plaintiffs the right to obtain prejudgment interest on damages awards to further deter anticompetitive conduct and increase compensation to injured parties.
Connectionstraces to 1
Traces to 1 document
Citation graph
cites case law
Sec. 2
Findings and purposes
Cites 1Cited by 0 across 0 sources