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A Fresh Take

Insights on M&A, litigation, and corporate governance in the US.

| 4 minutes read

Is Antitrust Reform on the Horizon? The Implications of the House Committee’s “Big Tech” Report

Antitrust has seized US policymakers’ attention like no other time in the last 40 years. The latest evidence of this newfound attention came earlier this week. On Tuesday, the Democratic Majority Staff to the House Subcommittee on Antitrust, Commercial, and Administrative Law released its much-anticipated report on competition in digital markets. The 449-page report caps a 15-month investigation into the practices of America’s “Big Tech” companies and follows on the heels of similar reports in Europe, the UK, and Australia. The Majority Report describes an ambitious array of legislative recommendations that, if enacted, would dramatically reshape the application of US antitrust law well beyond the tech sector and would have profound implications for businesses around the world.

Although once viewed as a bipartisan project, Democrats and Republicans ultimately split over the final recommendations, and Rep. Ken Buck, a Republican from Colorado, released a separate report entitled “The Third Way.” Differences between the Democratic and Republican approaches reduce the probability of sweeping Congressional action. There is, however, some common ground between the two sides, potentially shedding light on which of the proposals have the greatest chance of becoming law.

An Ambitious Effort to Rewrite US Antitrust Law

The Majority did not mince words about its view that the antitrust laws had failed to rein in the power of some of America’s largest companies and that substantial reforms to the antitrust laws are necessary. But the Majority’s most ambitious proposals appear unlikely to garner Republican support and thus face an uphill climb to being realized. Among the highest-profile recommendations is a proposal to prohibit companies that operate online platforms from selling their own products on those platforms, a structural separation often described as “Glass-Steagall for the Internet.” The Buck Report labels it a “non-starter.” It likewise dismisses the Majority’s proposed non-discrimination rules, which would prevent platforms from favoring their own products, as a net neutrality-style regulation of the sort long disfavored by Republicans. The Buck Report also rejects the Majority’s calls to ban forced arbitration clauses in contracts and to reduce obstacles to private litigants bringing class action lawsuits. In addition, the Buck Report declines to endorse the creation of bright-line presumptions against mergers by dominant platforms and against certain vertical mergers.

Areas of Common Ground Potentially Ripe for Reform

Maybe the most significant takeaways from the Majority Report and the Buck Report are their common views on several significant proposals that, if enacted, could have ramifications well beyond the tech sector. The Buck Report identifies four areas of agreement with the Majority Report:

  • More resources for the antitrust agencies: The reports agree that the Federal Trade Commission and the Antitrust Division of the Department of Justice should receive more funding. Commentators have criticized the agencies’ resource limitations and inability to pursue their missions more comprehensively in the face of a growing economy. Increased funding would allow the agencies to conduct additional in-depth merger investigations, devote more resources to conduct investigations (including monopolization investigations), and support additional antitrust litigation.
  • Establishing data portability and interoperability rules: Both reports recommend that Congress consider legislation requiring interoperability of systems and data portability. In their view, requiring interoperable systems and portable data would make digital markets more competitive by increasing innovation, reducing consumer switching costs, and lowering firms’ costs of entering new markets. Despite the apparent consensus in favor of interoperability and data portability, many legal and technical details would need to be resolved before any regulatory changes would have an impact.
  • Reforming the burden of proof in merger cases: Although the full extent of the alignment is not entirely clear, there is at least some significant agreement between the Majority Report and Buck Report on the need for legislation to make it easier for the antitrust agencies to challenge certain anticompetitive mergers. Both reports generally describe a state in which the pendulum had swung too far in favor of merging parties. In particular, the Buck Report proposes making it easier for the agencies to challenge mergers involving nascent or potential competitors, such as acquisitions of start-ups that could develop into competitors to large, dominant acquirers.
  • Clarifying that market definition is not required where there is direct evidence of market power: Both reports raise concerns about the Supreme Court’s decision in Ohio v. American Express and, in particular, the Court’s statement that some plaintiffs must define a proper antitrust market even where there is direct evidence of market power (i.e., actual evidence of price increases, output reductions, or other competitive harms). Eliminating the market definition requirement in those cases would give plaintiffs another way to bring successful antitrust claims.

While rejecting many of the Majority’s proposals and embracing others, the Buck Report also identifies areas where further study by Congress and feedback from experts would be important. The proposals include:

  • Revitalizing certain types of monopolization claims, including by reducing the requirements for proving monopoly-leveraging, predatory-pricing, refusal-to-deal, and essential-facilities claims; and
  • Overriding the holding in Ohio v. American Express that requires plaintiffs to prove harm to customers on both sides of a two-sided platform.

It could be significant that some Republicans are now publicly signaling openness to proposals that would extend the reach of the antitrust laws and increase the ability of the agencies and private plaintiffs to bring antitrust actions. Many conservatives would not seriously entertain these types of proposals, so the Buck Report’s willingness to engage on these issues could presage a broader bipartisan consensus on antitrust reform.

What May Lie on the Horizon

The Majority Report and the Buck Report are significant developments in US antitrust policy, and they underscore the increased pressure on the antitrust authorities to scrutinize potentially anticompetitive conduct and mergers. Many of the proposals, if enacted, could have substantial implications for companies doing business in the United States. What happens next will be influenced heavily by the results of the upcoming election and who controls power in the House of Representatives, the Senate, and the White House.


antitrust and competition