Senator Amy Klobuchar, the Chairwoman of the Senate Subcommittee on Antitrust, unveiled sweeping new legislation Thursday that could lead to the greatest expansion of federal power to maintain competition in a century.
The Minnesota Democrat’s bill seeks to require the Justice Department and the Federal Trade Commission to block mergers that would create “monopsony” power, when a firm becomes an overly dominant employer or purchaser of goods and services in a particular market. Monopsonies are the inverse of monopolies, which are firms that are overly dominant sellers of goods and services.
Companies including Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +1.38% and Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.87% are often said to have monopsony control in certain markets, as suppliers of goods have little choice but to meet strict conditions in order to sell on those platforms.
Economists also worry that monopsony power can reduce wages in certain industries with only a handful of employers, aided by tools like non-compete agreements that bar employees from seeking work with a competitor.
Klobuchar’s proposal would also force courts to move away from decades of jurisprudence that has forced regulators to focus almost exclusively on the impact of mergers and acquisitions on the prices consumers pay for products. Instead it would require antitrust enforcers and judges to consider “higher prices, lower quality, lessened choice, reduced innovation, foreclosure of competitors, and increased entry barriers,” in determining whether a company has engaged in anticompetitive behavior.
Given that some products offered by large technology firms are free to the end user, tech firms have often been protected under the current antitrust regime because their acquisitions haven’t appeared to raise prices for consumers.
The bill would also increase funding to the Department of Justice’s Antitrust Division and the Federal Trade Commission, which enforce antitrust laws, by $300 million, and allow the enforcers to seek civil penalties for violation of monopoly law.
Whistleblowers who alert authorities to anticompetitive behavior would also be given incentives to do so, including monetary awards if information given leads to civil penalties against a company.
The likelihood of the bill passing the Senate depends on whether Republicans will support it, given the 60-vote threshold needed to pass such legislation. Though individual members of the GOP have voiced support for a more robust antitrust regime, it is unclear whether they would support the specific provisions outlined in the Klobuchar bill.