Senate Democrats Introduce 'Better Deal' Antitrust Enforcement Legislation

As part of the effort to rebrand the party and reconnect with working-class voters who were lost in the presidential election, congressional Democrats revealed a new populist policy agenda, titled "A Better Deal: Better Jobs, Better Wages, Better Future" (hereinafter, "A Better Deal"), on Monday, July 24. The agenda outlined by A Better Deal has three pillars: (1) creating jobs and raising wages and incomes, (2) lowering the costs of living and (3) building an economy that helps families conquer challenges of the 21st century. The agenda includes several sections that will be fleshed out further over the coming weeks. Those sections, including one titled "Crack Down on Corporate Monopolies and the Abuse of Economic and Political Power" that focused on increased antitrust enforcement, will often be accompanied by legislation.

Indeed, yesterday, Sen. Amy Klobuchar (D-MN) introduced two bills that would strengthen antitrust enforcement as outlined in the antitrust section of A Better Deal.

Sen. Klobuchar's first bill, The Consolidation Prevention and Competition Promotion Act, S. 1812, would dramatically change current antitrust law by proposing new legal standards for approval of larger corporate mergers—those greater than $5 billion in value or involving a party with assets greater than $10 billion.

Most dramatically, the legislation would replace the well-established standard against mergers that would "substantially lessen" competition with a lower "materially likely" standard, which it now extends to monopsony in addition to monopoly. (emphasis added) In the preamble, the legislation makes clear that consolidation itself is harmful because, among other things, it threatens democracy by concentrating political power and creates hurdles for fresh competition from small businesses. A conclusion that a transaction "may cause more than a de minimis amount of harm to competition" is sufficient to make it illegal. Among the factors to be considered are the transaction's impact on market concentration, the value of the transaction ($5 billion, to be adjusted annually), the market capitalization, the value of assets held or the amount of sales made by any party ($100 billion, to be adjusted annually), regardless of horizontal competition between the merging parties.

These provisions codify intent to investigate vertical and conglomerate transactions, which the authors believe also create competitive harm. For transactions that satisfy these...