II 117th CONGRESS 1st Session S. 3267 IN THE SENATE OF THE UNITED STATES November 18, 2021 Ms. Klobuchar (for herself, Mr. Blumenthal , Ms. Hirono , and Mr. Booker ) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To reform the antitrust laws to better protect competition in the American economy, to amend the Clayton Act to modify the standard for an unlawful acquisition.

1. Short title This Act may be cited as the Consolidation Prevention and Competition Promotion Act of 2021 . 2. Findings and purposes (a) Findings Congress finds that— (1) 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; (2) when companies compete, businesses offer the highest quality and choice of goods and services for the lowest possible prices to consumers and other businesses; (3) competition fosters small business growth, reduces economic inequality, and spurs innovation and job creation; (4) in the United States economy today, the presence and exercise of market power is substantial and growing; (5) 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; (6) market power and undue market concentration contribute to the consolidation of political power, undermining the health of democracy in the United States; (7) 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; (8) 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; (9) horizontal consolidation, vertical consolidation, and conglomerate mergers all have potential to increase market power and cause anticompetitive harm; (10) extensive consolidation is reducing competition and threatens to place the American dream further out of reach for many consumers in the United States; (11) since 2008, firms in the United States have engaged in over $10,000,000,000,000 in mergers and acquisitions; (12) the acquisition of nascent or potential rivals by dominant firms can present significant long-term threats to competition and innovation; (13) 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—can present a threat to competition; (14) section 7 of the Clayton Act ( 15 U.S.C. 18 ), is the primary line of defense against anticompetitive mergers; and (15) in recent years, some court decisions and enforcement policies have limited the vitality of the Clayton Act to prevent harmful consolidation by— (A) discounting previously accepted presumptions that certain acquisitions are anticompetitive; (B) focusing inordinately on the effect of an acquisition on price in the short term, to the exclusion of other potential anticompetitive effects; (C) 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; and (D) requiring the government to prove harmful effects of a proposed merger to a near certainty. (b) Purposes The purposes of this Act are to— (1) 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; (2) 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; (3) amend the Clayton Act to clarify that an acquisition that tends to create a monopsony violates the Clayton Act; and (4) 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. 3. Definition In this Act the term antitrust laws — (1) has the meaning given the term in the first section of the Clayton Act ( 15 U.S.C. 12 ); and (2) includes— (A) section 5 of the Federal Trade Commission Act ( 15 U.S.C. 45 ) to the extent that such section applies to unfair methods of competition; and (B) this Act and the amendments made by this Act. 4. Unlawful acquisitions (a) Market power Section 1(a) of the Clayton Act ( 15 U.S.C. 12(a) ) is amended by adding at the end the following: the term market power in this Act means the ability of a person, or a group of persons acting in concert, to profitably impose terms or conditions on counterparties, including terms regarding price, quantity, product or service quality, or other terms affecting the value of consideration exchanged in the transaction, that are more favorable to the person or group of persons imposing them than what the person or group of persons could obtain in a competitive market. . (b) Unlawful acquisitions Section 7 of the Clayton Act ( 15 U.S.C. 18 ) is amended— (1) in the first and second undesignated paragraphs, by striking substantially to lessen each place that term appears and inserting to create an appreciable risk of materially lessening ; (2) by inserting or a monopsony after monopoly each place that term appears; and (3) by adding at the end the following: In a case brought by the United States, the Federal Trade Commission, or a State attorney general, a court shall determine that the effect of an acquisition described in this section may be to create an appreciable risk of materially lessening competition or to tend to create a monopoly or a monopsony, in or affecting commerce, if— (1) the acquisition would lead to a significant increase in market concentration in any relevant market; (2) (A) the acquiring person has a market share of greater than 50 percent or otherwise has significant market power, as a seller or a buyer, in any relevant market, and as a result of the acquisition, the acquiring person would obtain control over entities or assets that compete or have a reasonable probability of competing with the acquiring person in the same relevant market; or (B) as a result of the acquisition, the acquiring person would obtain control over entities or assets that have a market share of greater than 50 percent or otherwise have significant market power, as a seller or a buyer, in any relevant market, and the acquiring person competes or has a reasonable probability of competing with the entities or assets over which it would obtain control, as result of the acquisition, in the same relevant market; (3) the acquisition would lead to the combination of entities or assets that compete or have a reasonable probability of competing in a relevant market, and either the acquiring person or the entities or assets over which it would obtain control prevents, limits, or disrupts coordinated interaction among competitors in a relevant market or has a reasonable probability of doing so; (4) the acquisition— (A) would likely enable the acquiring person to unilaterally and profitably exercise market power or materially increase its ability to do so; or (B) would materially increase the probability of coordinated interaction among competitors in any relevant market; or (5) (A) the acquisition is not a transaction that is described in section 7A(c); and (B) (i) as a result of such acquisition, the acquiring person would hold an aggregate total amount of the voting securities and assets of the acquired person in excess of $5,000,000,000 (as adjusted and published for each fiscal year beginning after September 30, 2022, in the same manner as provided in section 8(a)(5) to reflect the percentage change in the gross national product for such fiscal year compared to the gross national product for the year ending September 30, 2021); or (ii) (I) the person acquiring or the person being acquired has assets, net annual sales, or a market capitalization greater than $100,000,000,000 (as so adjusted and published); and (II) as a result of such acquisition, the acquiring person would hold an aggregate total amount of the voting securities and assets of the acquired person in excess of $50,000,000 (as so adjusted and published), unless the acquiring or acquired person establish, by a preponderance of the evidence, that the effect of the acquisition will not be to create an appreciable risk of materially lessening competition or tend to create a monopoly or a monopsony. In this paragraph, the term materially means more than a de minimis amount. . 5. Post-settlement data Section 7A of the Clayton Act ( 15 U.S.C. 18a ) is amended by adding at the end the following: (l) (1) Each person who enters into an agreement with the Federal Trade Commission or the United States to resolve a proceeding brought under the antitrust laws or under the Federal Trade Commission Act ( 15 U.S.C. 41 et seq. ) regarding an acquisition with respect to which notification is required under this section shall, on an annual basis during the 5-year period beginning on the date on which the agreement is entered into, submit to the Federal Trade Commission or the Assistant Attorney General, as applicable, information sufficient for the Federal Trade Commission or the United States, as applicable, to assess the competitive impact of the acquisition, including— (A) the pricing, availability, and quality of any product or service, or inputs thereto, in any market, that was covered by the agreement; (B) the source, and the resulting magnitude and extent, of any cost-saving efficiencies or any benefits to consumers or trading partners that were claimed as a benefit of the acquisition and the extent to which any cost savings were passed on to consumers or trading partners; and (C) the effectiveness of any divestitures or any conditions placed on the acquisition in fully restoring competition. (2) The requirement to provide the information described in paragraph (1) shall be included in an agreement described in that paragraph. (3) The Federal Trade Commission, with the concurrence of the Assistant Attorney General, by rule in accordance with section 553 of title 5, United States Code, and consistent with the purposes of this section— (A) shall require that the information described in paragraph (1) be in such form and contain such documentary material and information relevant to an acquisition as is necessary and appropriate to enable the Federal Trade Commission and the Assistant Attorney General to assess the competitive impact of the acquisition under paragraph (1); and (B) may— (i) define the terms used in this subsection; (ii) exempt, from the requirements of this section, information not relevant in assessing the competitive impact of the acquisition under paragraph (1); and (iii) prescribe such other rules as may be necessary and appropriate to carry out the purposes of this section. . 6. Federal Trade Commission study Not later than 2 years after the date of enactment of this Act, the Federal Trade Commission, in consultation with the Securities and Exchange Commission, shall conduct and publish a study, using any compulsory process necessary, relying on public data and information if available and sufficient, and incorporating public comment on— (1) the extent to which an institutional investor or related institutional investors have ownership or control interests in competitors in moderately concentrated or concentrated markets; (2) the economic impacts of such overlapping ownership or control; and (3) the mechanisms by which an institutional investor could affect competition among the companies in which it invests and whether such mechanisms are prevalent. 7. GAO studies (a) In general Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall— (1) conduct a study to assess the success of merger remedies required by the Department of Justice or the Federal Trade Commission in consent decrees entered into since 6 years prior to the date of enactment of this Act, including the impact on maintaining competition, a comparison of structural and conduct remedies, and the viability of divested assets; and (2) conduct a study on the impact of mergers and acquisitions on wages, employment, innovation, and new business formation. (b) Update The Comptroller General of the United States shall— (1) update the study under paragraph (1) 3 years and 6 years after the date of enactment of this Act based on the information provided under section 7A(l) of the Clayton Act, as added by section 5 of this Act; and (2) identify specific remedies or alleged merger benefits that require additional information or research. 8. Office of Competition Advocate (a) Definitions In this section— (1) the term agency has the meaning given the term in section 551 of title 5, United States Code; (2) the term covered company means any company that has, at any time, been required to make a filing under section 7A of the Clayton Act ( 15 U.S.C. 18a ); (3) the term Office means the Office of the Competition Advocate established under subsection (b); (4) the term Chairman means the Chairman of the Commission; and (5) the term Commission means the Federal Trade Commission. (b) Establishment There is established within the Federal Trade Commission the Office of the Competition Advocate. (c) Competition advocate (1) In general The head of the Office shall be the Competition Advocate, who shall— (A) report directly to the Chairman; and (B) be appointed by the Chairman, with the concurrence of a majority of the Commission, including at least 1 Commissioner who is not a member of the same political party of the majority members of the Commission, from among individuals having experience in advocating for the promotion of competition. (2) Compensation The annual rate of pay for the Competition Advocate shall be equal to the highest rate of annual pay for other senior executives who report to the Chairman of the Commission. (3) Limitation on service An individual who serves as the Competition Advocate may not be employed by the Commission— (A) during the 2-year period ending on the date of appointment as Competition Advocate; or (B) during the 5-year period beginning on the date on which the person ceases to serve as the Competition Advocate. (d) Staff of office The Competition Advocate, after consultation with the Chairman of the Commission, shall retain or employ independent counsel, research staff, and service staff, as the Competition Advocate determines is necessary to carry out the functions, powers, and duties of the Office. (e) Duties and powers The Competition Advocate shall— (1) recommend processes or procedures that will allow the Federal Trade Commission and the Antitrust Division of the Department of Justice to improve the ability of each agency to solicit reports from consumers, small businesses, and employees about possible anticompetitive practices or adverse effects of concentration; (2) publicly provide recommendations to other Federal agencies about administrative actions that may have anticompetitive effects and the potential harm to competition if those actions are carried out; (3) provide recommendations to other Federal agencies about administrative actions that may have procompetitive effects and the potential benefit to competition if those actions are carried out; (4) publish periodic reports on— (A) market competition and its impact on the United States, local geographic areas, and different demographic and socioeconomic groups; and (B) the success of remedies required by the Department of Justice or the Federal Trade Commission in consent decrees; (5) collect data regarding concentration levels across industries and the impact and degree of antitrust enforcement; and (6) standardize the types and formats of data reported and collected. (f) Subpoena authority (1) In general The Competition Advocate may either require the submission of or accept voluntary submissions of periodic and other reports from any covered company for the purpose of assessing competition and its impact on the United States, local geographic areas, and different demographic and socioeconomic groups. (2) Written finding Before issuing a subpoena to collect the information described in paragraph (1), the Competition Advocate shall make a written finding that— (A) the data is required to carry out the functions of the Competition Advocate; and (B) the information is not available from a public source or another agency. (3) Mitigation of report burden Before requiring the submission of a report from any company required to make a filing under section 7A of the Clayton Act ( 15 U.S.C. 18a ), the Competition Advocate shall— (A) coordinate with other agencies or authority; and (B) whenever possible, rely on information available from such agencies or authority. (g) Data center (1) Establishment There is established within the Office the Data Center. (2) Duties The Data Center shall— (A) collect, validate, and maintain data obtained from agencies, as defined in section 551 of title 5, United States Code, commercial data providers, publicly available data sources, and any covered company; and (B) prepare and publish, in a manner that is easily accessible to the public— (i) a concentration database; (ii) a merger enforcement database; (iii) any other database that the Competition Advocate determines is necessary to carry out the duties of the Office; and (iv) the format and standards for Office data, including standards for reporting financial transaction and position data to the Office. (3) Regulations The Competition Advocate shall promulgate regulations relating to the collection and standardizing of data under paragraph (2). (4) Confidentiality (A) In general The Data Center may not disclose any confidential data collected under paragraph (2). (B) Requirements Data obtained from an agency shall be subject to the same confidentiality requirements and protection as the agency providing the data. (C) Information security The Competition Advocate shall ensure that data collected and maintained by the Data Center are kept secure and protected against unauthorized disclosure. (h) Division of market analysis (1) Establishment There is established within the Office the Division of Market Analysis. (2) Leadership The head of the Division of Market Analysis shall be the Director of Market Analysis, who shall— (A) report directly to the Competition Advocate; and (B) be appointed by the Competition Advocate, with the concurrence of a majority of the Commission, including at least one Commissioner who is not a member of the same political party of the majority members of the Commission. (3) Division staff The Division of Market Analysis shall retain or employ independent legal, economic, research, and service staff sufficient to carry out the functions, powers, and duties of the Division. (4) Duties and powers The Division of Market Analysis— (A) shall, at the direction of the Competition Advocate or the Commission, conduct investigations of markets or industry sectors to analyze the competitive conditions and dynamics affecting such markets or industry sectors, including the effects that market concentration, mergers and acquisitions, certain types of agreements, and other forms of business conduct have on competition, consumers, workers and innovation, and shall publish reports on the results of such investigations; (B) shall, at the direction of the Competition Advocate or the Commission, conduct investigations concerning the competitive effects of acquisitions that have been consummated no less than 2 years prior to the start of the investigation, which shall include recommendations concerning appropriate enforcement action to remedy any anticompetitive effects discovered and may include assessments of— (i) the conditions of the relevant markets affected by the acquisition, over the period since the acquisition was consummated, including, but not limited to, the potential impact that the acquisition has had on— (I) the prices of goods or services, including wages in any affected labor markets; (II) the output and quality of goods and services; (III) the entry or exit of competitors; (IV) innovation; (V) consumer choice and product variety; (VI) the opportunity of suppliers and works to sell their product or services; (VII) coordinated interaction between competitors; and (VIII) subsequent mergers and acquisitions activity; (ii) whether the acquiring person or its successors in interest— (I) complied with all obligations under any agreement with the Federal Trade Commission, the United States, or State law enforcement authorities to resolve a proceeding brought under the antitrust laws; and (II) achieved measurable, transaction-specific efficiencies, which did not arise from anticompetitive reductions of output, as a result of the acquisition; and (iii) whether any agreements with the Federal Trade Commission or the United States to resolve a proceeding brought under the antitrust laws regarding the acquisition was effective in mitigating the anticompetitive effects from the acquisition; (C) shall rely on public data and information, public comment, information from other Federal agencies, information from the Data Center, information obtained pursuant to the Competition Advocate’s subpoena authority under subsection (f) of this section and may use compulsory process under section 6(b) of the Federal Trade Commission Act ( 15 U.S.C. 46(b) ) as necessary to carry out the functions set forth in subsections (h)(3)(A) and (h)(3)(B) of this section; and (D) shall report any evidence it obtains that any person, partnership, or corporation has engaged in transactions or conduct that may constitute of a violation of the antitrust law to the Commission, which may institute further investigation, initiate enforcement proceedings, or refer such evidence to the Attorney General. 9. Market definition (a) In general Establishing liability under the antitrust laws does not require the definition of a relevant market, except when the definition of a relevant market is required, to establish a presumption or to resolve a claim, under a statutory provision that explicitly references the terms relevant market , market concentration , or market share . Statutory references to the term line of commerce shall not constitute an exception to the foregoing rule that establishing liability under the antitrust laws does not require the definition of a relevant market. (b) Direct evidence If direct evidence in the record is sufficient to prove actual or likely harm to competition, an appreciable risk to competition sufficient to satisfy the applicable statutory standard, or that the effect of an acquisition subject to section 7 of the Clayton Act ( 15 U.S.C. 18 ) may be to create an appreciable risk of materially lessening competition or to tend to create a monopoly or a monopsony, neither a court nor the Federal Trade Commission shall require definition of a relevant market in order to evaluate the evidence, to find liability, or to find that a claim has been stated under the antitrust laws. (c) Rule of construction Nothing in this section may be construed to prevent a court or the Federal Trade Commission from considering evidence relating to the definition of proposed relevant markets to evaluate the merits of a claim under the antitrust laws. 10. Additional remedies; rules of construction (a) Additional remedies The rights and remedies provided under this Act are in addition to, not in lieu of, any other rights and remedies provided by Federal law, including under section 4, 4A, 15, or 16 of the Clayton Act ( 15 U.S.C. 15 , 15a, 25, 26) or section 13(b) of the Federal Trade Commission Act ( 15 U.S.C. 53(b) ). (b) Rules of construction Nothing in this Act may be construed to— (1) impair or limit the applicability of any of the antitrust laws; and (2) prohibit any other remedy provided by Federal law.