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"O ver the past decade, Google, Amazon, Facebook, and Appleâcollectively known as the "Big Four" or "Big Tech"âhave revolutionized the internet economy and affected the daily lives of billions of people worldwide. Google operates a search engine that processes over 3.5 billion searches a day (Google Search), runs the biggest online video platform (YouTube), licenses the world's most popular mobile operating system (Android), and is the largest seller of online advertising. Amazon is a major online marketplace, retailer, logistics network, cloud-storage host, and television and film producer. Facebook boasts 2.4 billion monthly active users worldwide, meaning more people use the social network than follow any single world religion. Apple popularized the smartphone, making the device so ubiquitous that consumers have grown accustomed to carrying a supercomputer in their pocket. Collectively, the Big Four generated over $690 billion in revenue in 2018âa sum larger than the annual GDPs of most national economies. While these companies are responsible for momentous technological breakthroughs and massive wealth creation, they have also received scrutiny related to their privacy practices, dissemination of harmful content and misinformation, alleged political bias, andâas relevant hereâpotentially anticompetitive conduct. In June 2019, the Wall Street Journal reported that the Department of Justice (DOJ) and Federal Trade Commission (FTC)âthe agencies responsible for enforcing the federal antitrust lawsâagreed to divide responsibility over investigations of the Big Four's business practices. Under these agreements, the DOJ reportedly has authority over investigations of Google and Apple, while the FTC will look into Facebook and Amazon. The following month, the DOJ announced a potentially broader inquiry into Big Tech. Specifically, the Justice Department's Antitrust Division revealed that it intends to examine possible abuses of market power by unnamed "market-leading online platforms" âan announcement that has led some to speculate that a number of the Big Four may face investigations from both agencies despite the previously reported agreements. Big Tech's business practices have also attracted congressional interest. In May 2019, the Senate Judiciary Committee held a hearing to investigate privacy and competition issues in the digital advertising industry. And in June and July, the House Judiciary Committee held two separate hearings examining the market power of online platforms. This report provides an overview of antitrust issues involving the Big Four. The report begins with a general outline of the aspects of antitrust doctrine that are most likely to play a central role in the DOJ and FTC investigationsâspecifically, the case law surrounding monopolization and mergers. Next, the report discusses the application of this doctrine to each of the Big Four. Finally, the report concludes by examining policy options related to the promotion of digital competition. Legal Background General Principles Contemporary antitrust doctrine reflects a commitment to the promotion of economic competition, which induces businesses to cut costs, improve their productivity, and innovate. These virtues of competition are often illustrated with the stylized hypothetical of a "perfectly competitive" market with homogenous products, a large number of well-informed buyers and sellers, low entry barriers, and low transaction costs. In such a market, businesses must price their products at marginal cost to avoid losing their customers to competitors. However, real-world markets almost always deviate from this textbook model of perfect competition. When one or more of the structural conditions identified above is absent, individual firms may have market power âthe ability to profitably raise their prices above competitive levels. At the extreme, a market can be monopolized when a single firm possesses significant and durable market power. According to standard justifications for antitrust law, the exercise of significant market power harms consumers by requiring them to pay higher prices than they would pay in competitive markets, purchase less desirable substitutes, or go without certain goods and services altogether. Moreover, significant market power harms society as a whole by reducing output and eliminating value that would have been enjoyed in a competitive market. Contemporary antitrust doctrine is focused on preventing these harms by prohibiting exclusionary conduct by dominant firms and anticompetitive mergers and acquisitions. The following subsections discuss these prohibitions in turn. Section 2 of the Sherman Act: Monopolization Section 2 of the Sherman Antitrust Act of 1890 makes it unlawful to monopolize, attempt to monopolize, or conspire to monopolize "any part of the trade or commerce among the several States, or with foreign nations." However, the statute itself does not define what it means to "monopolize" trade or commerce, leaving the courts to fill out the meaning of that concept through common law decisionmaking. Consistent with this approach, the Supreme Court's interpretation of Section 2 has evolved in response to changes in economic theory and business practice. In its monopolization case law, the Court has made clear that the possession of monopoly power and charging of monopoly prices do not by themselves constitute Section 2 violations. Instead, the Court has held that a company engages in monopolization if and only if it (1) possesses monopoly power, and (2) engages in exclusionary conduct to achieve, maintain, or enhance that power. Monopoly Power To prevail in a Section 2 case, plaintiffs must show that a defendant possesses monopoly power. While the Supreme Court has explained that a firm has market power if it can profitably charge supra-competitive prices, the Court has described monopoly power as "the power to control prices or exclude competition," which requires "something greater" than market power. Lower federal courts have held that a firm possesses monopoly power if it possesses a high degree of market power. A Section 2 plaintiff can establish that a defendant possesses monopoly power in two ways. First, plaintiffs can satisfy this requirement with direct evidence of monopoly powerâthat is, evidence that the defendant charges prices significantly exceeding competitive levels. However, such evidence is typically difficult to adduce because of complications in determining appropriate measures of a firm's costs, among other things. As a result, plaintiffs generally attempt to establish that a defendant has monopoly power with indirect evidence showing that the defendant (1) possesses a large share of a relevant market, and (2) is protected by entry barriers. Market Share To demonstrate that a defendant possesses a dominant market share, plaintiffs must define the scope of the market in which the defendant operates. Predictably, antitrust plaintiffs typically argue that a defendant operates in a narrow market with few competitors, while defendants ordinarily contend that they operate in a broad market with many rivals. Because the size of the market in which a defendant operates (the denominator in a market-share calculation) is generally harder to determine than its sales or revenue (the numerator in such a calculation), parties in antitrust litigation often vigorously contest the issue of market definitionâso much, in fact, that more antitrust cases hinge on that question than on "any other substantive issue" in competition law. Market Definition: Substitutability and the SSNIP Test . In analyzing market definition, the Supreme Court has explained that a relevant antitrust market consists of the product at issue in a given case and all other products that are "reasonably interchangeable" with it. According to the Court, whether one product is "reasonably interchangeable" with another product depends on demand substitutionâthat is, the extent to which an increase in one product's price would cause consumers to purchase the other product instead. The Court has further explained that a variety of "practical indicia" are relevant to an assessment of whether goods and services are reasonable substitutes, including 1. industry or public recognition of separate markets; 2. a product's peculiar characteristics and uses; 3. unique production facilities; 4. distinct customers; 5. distinct prices; 6. sensitivity to price changes; and 7. specialized vendors. These criteria are sometimes called the " Brown Shoe " factors based on the name of the 1962 decision in which the Court identified them. In addition to the Brown Shoe factors, the DOJ and FTC have provided specific market-definition guidance in their Horizontal Merger Guidelines. The 2010 version of the Guidelines endorses the "hypothetical monopolist" test for defining markets, whichâlike the Court's case lawâprincipally focuses on demand substitution. Under this test, a group of products qualifies as a relevant antitrust market if a hypothetical monopolist selling those products would find it profitable to raise their price notwithstanding buyers' incentives to substitute other goods and services in response. Specifically, the test asks whether a hypothetical monopolist would be able to profitably impose a "small but significant and non-transitory increase in price" (SSNIP)âgenerally, a 5% increase. If buyer substitution to other products would make such a price increase unprofitable, then the candidate market must be expanded until a hypothetical monopolist would benefit from such a strategy. One popular antitrust treatise illustrates the SSNIP test's application by comparing proposed markets consisting of Ford passenger cars and all passenger cars . Because Fordâwhich has a "monopoly" over the sale of Ford passenger carsâwould likely be unable to profitably raise its prices by 5% because of the business it would lose to other car companies, Ford passenger cars are unlikely to qualify as a properly defined antitrust market. However, because a hypothetical firm with a monopoly over passenger cars likely could profit from such a price increase, passenger cars likely qualify as a distinct antitrust market. Market Definition and Big Tech: The Challenge of Zero-Price Markets. The SSNIP test's application to certain technology markets raises difficult issues. In a number of technology markets, firms do not charge customers for access to certain services like online search and social networking. The difficulty with applying the SSNIP test to such markets is clear: as one commentator notes, there is "no sound way" to analyze a 5% increase in a price of zero because such an increase would result in a price that remains zero . The SSNIP test as traditionally administered is accordingly "inoperable" in a number of zero-price technology markets. Some courts and commentators have responded to this difficulty in applying the SSNIP test to zero-price markets by concluding that such markets are categorically exempt from antitrust scrutiny. In Kinderstart.com, LLC v. Google, Inc. , for example, a federal district court dismissed allegations that Google monopolized the market for online search on the grounds that Google does not charge customers to use its search engine. Several commentators have echoed the general line of reasoning behind the Kinderstart decision and questioned whether the provision of free services can result in the type of consumer harm that antitrust law is intended to remedy. However, others have rejected this argument and maintain that antitrust law has an important role to play in zero-price markets. Some of these commentators have argued that zero-price transactions are not in fact "free" to consumers, and that consumers ultimately "pay" for putatively "free" goods and services with both their attention and personal data. According to this line of argument, many of these consumers may actually be overpaying . That is, some observers have argued that certain "free" products and services may have negative equilibrium prices under competitive conditions, meaning that firms in the relevant markets would pay consumers for their attention and the use of their data if faced with sufficiently robust competition. Other commentators have argued that firms offering zero-price products and services can compete on a variety of nonprice dimensions such as quality and privacy, and that antitrust law can promote consumer welfare in zero-price markets by ensuring that companies engage in these types of nonprice competition. This argument appears to have persuaded regulators at the DOJ. In a February 2019 speech, Makan Delrahimâthe head of the Justice Department's Antitrust Divisionâcontended that antitrust law applies "in full" to zero-price markets because firms offering "free" products and services compete on a variety of dimensions other than price. While many observers accordingly agree that zero-price markets are not categorically immune from antitrust scrutiny, the optimal approach to defining the scope of such markets remains open to debate. Some commentators have argued that regulators should modify the SSNIP test to account for quality-adjusted prices, creating a new methodology called the "small but significant and non-transitory decrease in quality" (SSNDQ) test. According to these academics, decreases in the quality of "free" services (e.g., a decline in the privacy protections offered by a social network) are tantamount to increases in the quality-adjusted prices of those services. Under the SSNDQ test, then, a firm offering "free" goods or services would possess monopoly power if it had the ability to profitably raise its quality-adjusted prices significantly above competitive levels. In contrast, other analysts have proposed that courts and regulators evaluate the scope of zero-price markets by engaging in qualitative assessments of the degree to which various digital products and services are "reasonably interchangeable." For example, in a 2019 European Commission report on digital competition, a group of commentators proposed a "characteristics-based" approach to market definition for zero-price industries under which regulators would compare the functions of relevant digital services. This type of qualitative method for defining relevant product markets has some support in U.S. antitrust doctrine. As discussed, under Brown Shoe 's "practical indicia" approach, a product's "peculiar characteristics and uses" are relevant factors in determining the appropriate scope of an antitrust market. While lower courts have described such informal methods as "old school" in light of the sophisticated econometric evidence typically produced in contemporary antitrust litigation, they have also recognized that Brown Shoe remains good law and have employed its "practical indicia" approach despite its somewhat anachronistic status. As a result, regulators may engage in qualitative comparisons of the functions of various digital services in assessing the scope of certain zero-price markets. Regulators could plausibly supplement such inquiries with surveys or other empirical evidence evaluating which products consumers regard as "reasonably interchangeable" with the product at issue in a given case. Finally, a number of courts employing the Brown Shoe criteria have emphasized "industry recognition" of the scope of certain markets. Specifically, these courts have relied on corporate conduct, internal strategy documents, and expert testimony to determine the types of companies that a defendant regards as competitors. Accordingly, courts and regulators may be able to rely on these types of qualitative evidence to determine the scope of certain zero-price digital markets. Market Shares: How Much Is Enough? Once a Section 2 plaintiff has defined a relevant antitrust market, it must show that the defendant occupies a dominant share of that market. Courts have recognized that there is no fixed market-share figure that conclusively establishes that a defendant-company has monopoly power. However, the Supreme Court has never held that a party with less than 75% market share has monopoly power. Lower court decisions provide a number of other useful data points. In the U.S. Court of Appeals for the Second Circuit's influential decision in United States v. Aluminum Co. of America , Judge Learned Hand reasoned that (1) a 90% market share can be sufficient to establish a prima facie case of monopoly power, (2) a 60% or 64% share is unlikely to be sufficient, and (3) a 33% share is "certainly" insufficient. Similarly, the Tenth Circuit has explained that courts generally require a market share between 70% and 80% to establish monopoly power. And the Third Circuit has reasoned that a defendant's market share must be "significantly larger" than 55%, while holding that a share between 75% and 80% is "more than adequate" to establish a prima facie case of monopoly power. Entry Barriers Several courts have held that proof that a defendant occupies a large market share is insufficient on its own to establish that the defendant has monopoly power. Instead, these courts have concluded that a defendant must also be insulated from potential competitors by significant entry barriers to possess the type of durable monopoly power necessary for a SectionÂ 2 case. Courts and commentators generally use the concept of entry barriers to refer to long-run costs facing new entrants but not incumbent firms, including (1) legal and regulatory requirements, (2) control of an "essential or superior resource," (3) "entrenched buyer preferences for established brands," (4) "capital market evaluations imposing higher capital costs on new entrants," and (5) in certain circumstances, economies of scale. The significance of any entry barriers shielding Big Tech companies is a fact-intensive question that will depend on the specific evidence that the DOJ and FTC uncover. However, commentators have identified a number of plausible entry barriers in certain digital markets, including: Network Effects . A digital platform benefits from network effects when its value to customers increases as more people use it. A platform exhibits "direct" or "same-side" network effects when its value to users on one side of the market increases as the number of users on that side of the market increases. Social networks arguably exhibit this category of network effects because their value to users is dependent on the number of other users that they are able to attract. In contrast, a platform exhibits "indirect" or "cross-side" network effects when its value to users on one side of the market increases as the number of users on the other side of the market increases. Search engines arguably benefit from indirect network effects because they become more valuable to advertisers as they attract additional users who can be targeted with ads. Some courts and commentators have concluded that both categories of network effects represent entry barriers that make it difficult for small firms to meaningfully compete with larger incumbents in certain digital markets. The Advantages of Big Data . A number of commentators have argued that the significant volume of user data generated by certain digital platforms confers important advantages on established companies. According to this theory, large firms with access to significant amounts of data can use that data to improve the quality of their products and services (e.g., by increasing the accuracy of a search engine, improving targeted advertising, or offering targeted discounts)âa process that attracts additional customers, who in turn generate more data. Some commentators have accordingly argued that access to "big data" can result in a feedback loop that reinforces the dominance of large firms. Costs of Switching and Multi-Homing . Some commentators have argued that consumers in certain digital markets are unlikely to switch from one platform to another or use multiple platforms simultaneouslyâa phenomenon that advantages large established companies. These "lock-in" effects can have a variety of causes. A digital platform's customers may be dissuaded from switching to another platform by the prospect of losing their photos, contacts, search history, apps, or other personal data. To similar effect, technology companies may "tie" various products or services together through contractual requirements or technical impediments that prevent customers from simultaneously using competing products or services. Finally, some consumers may exhibit behavioral biases that render their initial choice of a platform "sticky," making them unlikely to switch platforms even when presented with superior alternatives. All of these factors can create a powerful "first-mover advantage" for incumbent firms that deters potential competitors. In contrast, others have questioned whether digital markets exhibit significant entry barriers. For example, Google has repeatedly denied the claim that it is insulated from rivals, arguing that consumers incur low costs in switching to alternative search engines because competition is only "one click away." Similarly, other commentators have argued that the history of upstart rivals supplanting once-dominant technology companies suggests that any monopoly power in dynamic technology markets is unlikely to be durable. Exclusionary Conduct In addition to establishing that a defendant possesses monopoly power, Section 2 plaintiffs must demonstrate that the defendant engaged in exclusionary conduct to achieve, maintain, or enhance that power. While the Supreme Court has developed tests for evaluating whether specific categories of behavior qualify as prohibited exclusionary conduct, it has not endorsed a general standard for distinguishing such conduct from permissible commercial activities. However, courts have made clear that exclusionary conduct must involve harm to the competitive process and not simply harm to a defendant's competitors . The following subsections discuss how courts have evaluated specific categories of behavior under Section 2. Predatory Pricing A monopolist can violate Section 2 by pricing its products below cost to eliminate competitorsâa practice commonly known as "predatory pricing." However, because price cutting ordinarily benefits consumers, the Supreme Court has "carefully limited" the circumstances in which charging low prices qualifies as impermissible exclusionary conduct. Specifically, under the so-called Brooke Group test, a plaintiff bringing predatory-pricing claims must show that a monopolist (1) priced the relevant product below an appropriate measure of cost, and (2) had a "dangerous probability" of recouping its losses by raising prices upon the elimination of its competitors. The Court has defended Brooke Group 's safe harbor for above-cost pricing on the grounds that courts cannot identify anticompetitive above-cost prices without chilling legitimate price competition. Similarly, the Court has explained that a "dangerous probability" of recoupment is necessary to state a predatory-pricing claim because without recoupment, low prices enhance consumer welfare. Some commentators have suggested that there may be cognizable affirmative defenses to predatory-pricing allegations even when the two Brooke Group requirements are satisfied. Specifically, firms accused of predatory pricing may be able to defend such charges on the grounds that certain below-cost pricing practices are procompetitive. For example, in a DOJ lawsuit targeting collusion in the e-book industry, regulators explained their decision not to pursue predatory-pricing charges against Amazon on the grounds that the company charged below-cost prices for certain categories of e-books because it intended those books to be "loss leaders." Unlike a firm that engages in predatory pricingâwhich charges below-cost prices for certain products with an eye towards recouping its losses by charging monopoly prices for those products upon the elimination of competitorsâa firm that sells a loss-leader charges below-cost prices to induce consumers to purchase other goods or services at above-cost prices. Similarly, some commentators have suggested that below-cost prices that are intended to be promotional in nature or develop the type of user base necessary to realize network effects should not be condemned under Section 2. The application of predatory-pricing doctrine to Big Tech markets is discussed in greater detail in " Amazon " infra . Refusals to Deal and Essential Facilities Refusals to Deal . The Supreme Court has explained that companies are generally free to choose their business partners and counterparties. However, the Court has held that Section 2 requires monopolists to do business with their rivals in certain limited circumstances. In its key modern refusal-to-deal decision, Aspen Skiing Co. v. Aspen Highlands Skiing Co. , the Court affirmed a jury verdict holding a dominant ski-service operator liable under Section 2 for refusing to do business with a competitor. The defendant in Aspen Skiing âa ski-service operator that owned three of the four mountains in a popular skiing areaâterminated a joint venture with the owner of the fourth mountain under which the companies offered a combined four-mountain ski pass. The defendant also refused to sell its daily ski tickets to the competitor to prevent the competitor from creating an alternative ticket package that functionally replicated the previous offering. In affirming the verdict finding the dominant ski operator liable under Section 2, the Court explained that the jury could have reasonably concluded that the defendant elected to forgo short-term benefits from the joint venture and ticket sales to eliminate its rival from the market. According to the Court, this conclusion was reasonable because the defendant had (1) ceased what was presumably a profitable course of dealing, (2) refused to sell its tickets to the competitor at prevailing retail prices, and (3) failed to offer a plausible efficiency-based justification for its conduct. However, the Court has subsequently construed Aspen Skiing narrowly. In Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP , the Court rejected the argument that Section 2 required a monopolist in the market for wholesale local telephone service to offer adequate interconnection services to its downstream rivals in the market for retail phone service. In reaching this conclusion, the Court characterized its previous decision in Aspen Skiing as "at or near the outer boundary" of Section 2 liability. The Court then distinguished that case on the grounds that unlike the dominant ski-service operator in Aspen Skiing , the wholesale telephone-service monopolist had not ceased a previous course of dealing with its competitors. The Court also observed that unlike the defendant in Aspen Skiing , the monopolist in Trinko did not refuse to sell its competitors a product that it offered to the publicâanother factor that can suggest an anticompetitive intent to forgo short-term profits to eliminate rivals. In the absence of these factors, the Court explained, Section 2 did not require the telephone monopolist to do business with its competitors. Essential Facilities . A number of lower courts have recognized a subset of cases in which monopolists have a duty to deal with rivals under what has been called the "essential-facilities" doctrine. In developing this doctrine, lower courts have relied principally on the Supreme Court's decisions in United States v. Terminal Railroad Association of St. Louis and Otter Tail Power Co. v. United States . In Terminal Railroad Association of St. Louis , the Court held that a consortium of railroads that controlled the facilities necessary to carry traffic across the Mississippi River in St. Louis violated Section 2 by refusing to grant other railroads access to those facilities. Similarly, in Otter Tail Power Co. , the Court held that a vertically integrated power company violated Section 2 by refusing to transmit wholesale power to municipalities seeking to operate their own retail distribution systems. According to the leading formulation of the essential-facilities doctrine that has been derived from these decisions, a plaintiff bringing an essential-facilities claim must show that (1) a monopolist controls access to an "essential" facility, (2) competitors cannot "practically or reasonably" duplicate that facility, (3) the monopolist has denied access to the facility to a competitor, and (4) the monopolist can feasibly share access to the facility. In applying this test, courts have held that a facility need not be "indispensable" to qualify as "essential." Rather, essential-facilities plaintiffs need only establish that duplication of the facility would be "economically infeasible," and that the denial of its use "inflicts a severe handicap on potential market entrants." However, plaintiffs must show more than mere "inconvenience" to prevail on an essential-facilities cause of action, and courts have accordingly rejected Section 2 claims when plaintiffs had reasonable alternatives to the relevant facility. In assessing the third element of the essential-facilities testâwhich asks whether a dominant firm has denied access to an essential facilityâcourts have held that although monopolists need not allow competitors "absolute equality of access," an offer to deal with competitors "only on unreasonable terms and conditions" may violate Section 2 by amounting to "a practical refusal to deal." Finally, in assessing the "feasibility" requirement for essential-facilities claims, several courts have held that the viability of sharing an essential facility must be assessed in the context of a company's "normal business operations," and that monopolists accordingly need not share such facilities if they can identify "legitimate business reasons" for refusing access. The application of the refusal-to-deal and essential-facilities doctrines to specific Big Tech companies is discussed in greater detail in " Google Search: Refusals to Deal and Essential Facilities " and " Amazon " infra . Tying and Exclusionary Product Design In certain circumstances, "tying" separate products togetherâthat is, selling one product (the "tying" product) on the condition that buyers also purchase another product (the "tied" product)âcan violate Section 2. Firms can tie products together in a variety of ways. In a "bundled tie," a company simultaneously sells two or more products, one of which it does not sell separately. In contrast, "contractual ties" often involve a requirement that a buyer purchase different products at different times. And firms engage in "technological ties" when they physically integrate different products that are not sold separately or design their products in a way that makes them incompatible with products offered by other firms. According to the Supreme Court, certain tying arrangements can harm competition by allowing a firm with monopoly power in the market for the tying product to extend its dominance into the market for the tied product. Some commentators have also argued that tying arrangements can allow a monopolist to maintain its monopoly in the tying-product market by requiring potential rivals to enter both that market and the market for the tied product, which can act as a formidable entry barrier. Under contemporary tying doctrine, a plaintiff can establish that a defendant engaged in per se illegal tying if it can demonstrate (1) the existence of two separate products, (2) that the defendant conditioned the sale of one product on the purchase the other product, (3) that the arrangement affects a "substantial volume" of interstate commerce, and (4) that the defendant has market power in the market for the tying product. However, plaintiffs can also prevail on tying claims even if they cannot make these showings. When one or more of these conditions is absent, courts evaluate tying claims under a totality-of-the-circumstances approach known as the Rule of Reason. Under this three-step burden-shifting framework, the plaintiff bears the initial burden of establishing that a challenged tying arrangement harms competition. If the plaintiff makes this showing, the burden shifts to the defendant to rebut the plaintiff's case with evidence that the challenged tying arrangement has procompetitive benefits. And if the defendant succeeds in rebutting the plaintiff's prima facie case, the factfinder must weigh the procompetitive benefits of a challenged tying arrangement against its anticompetitive harms. In addition to these general principles of tying doctrine, lower courts have developed a separate body of case law concerning technological tiesâa category of conduct that is sometimes described as "exclusionary product design." The standard exclusionary-design claim alleges that a monopolist changed a product's design in a way that makes the product difficult or impossible to use with complementary products sold by other firms, thereby extending its dominance into the market for the complementary products in a manner that is broadly similar to the effects of other sorts of tying arrangements. One commentator has described the case law on exclusionary design as "somewhat tangled," but certain broad principles can be distilled from the relevant decisions. Generally courts are "very skeptical" about exclusionary-design claims out of fear that expansive liability for design decisions will chill innovation. In California Computer Products v. IBM Corp. , for example, the Ninth Circuit rejected claims that a dominant computer manufacturer violated Section 2 by introducing a new line of computers that were integrated with certain "peripherals" (e.g., disks and memory devices) and incompatible with peripherals sold by other companies. The court rejected this argument on the grounds that the manufacturer's integration of the peripherals lowered its costs and improved the computers' performance. The Second Circuit adopted a standard that is even more deferential toward exclusionary-design defendants in Berkey Photo, Inc. v. Eastman Kodak Co. , where it held that a dominant camera manufacturer had not violated Section 2 by launching a new camera and film that were incompatible with products sold by a rival. In that decision, the court held that the defendant had not engaged in exclusionary conduct even when faced with conflicting evidence as to whether the new camera was superior to previous versions. In the face of this evidence, the court opted to defer to market forces, explaining that consumers should be left to determine whether they preferred the new product. However, the D.C. Circuit's landmark 2001 decision in United States v. Microsoft Corp . marked a departure from previous exclusionary-design cases. In that case, the court evaluated Microsoft's integration of its internet-browser software (Internet Explorer) with its dominant personal-computer operating system (Windows OS). Microsoft had effectuated this integration in three ways: by (1) excluding Internet Explorer programs from Windows OS's "Add/Remove Programs" function, (2) programming Windows to sometimes override users' choice to set browsers other than Internet Explorer as their default browsers, and (3) commingling Internet Explorer's code with Windows code so that any attempt to delete Internet Explorer would cripple the operating system. The government alleged that this conduct harmed competition in the market for internet browsers by deterring consumers from using browsers other than Internet Explorer. In evaluating Microsoft's product design, the D.C. Circuit employed the Rule of Reason. At the first step of that inquiry, the court concluded that the government had made a prima facie case that each of the challenged practices harmed competition in the market for internet browsers, shifting the burden to Microsoft to identify procompetitive justifications for its actions. The D.C. Circuit proceeded to conclude that Microsoft successfully rebutted the government's case against the second category of challenged conductâprogramming Windows to sometimes override default browser choicesâbecause the company proffered valid technical reasons for its programming decisions. However, the court held that because Microsoft failed to establish that the remaining categories of conduct had procompetitive benefits, that conduct violated Section 2. In contrast, some post- Microsoft decisions from other federal circuits have been more favorable to exclusionary-design defendants. In Allied Orthopedic Appliances, Inc. v. Tyco Health Care Group LP , the Ninth Circuit eliminated the third step of the Rule-of-Reason test and refused to "balance" a challenged design's procompetitive benefits against its anticompetitive harms. Instead, the court rejected exclusionary-design claims on the grounds that it was "undisputed" that the new product had improved upon previous versions in certain respects. In such cases, the court explained, a monopolist's design change is "necessarily tolerated by the antitrust laws" irrespective of its anticompetitive effects. The lower federal courts are accordingly split on the proper analytical approach to exclusionary-design claims. The application of tying and exclusionary-design doctrine to specific Big Tech companies is discussed in greater detail in " Android: Tying and Exclusive Dealing " and " Apple " infra . Exclusive Dealing In certain circumstances, a monopolist can violate Section 2 by entering into "exclusive-dealing" agreements with its customers or suppliersâthat is, agreements in which a buyer agrees to purchase certain goods or services only from the monopolist or a seller agrees to sell certain goods and services only to the monopolist for a certain time period. Such agreements can be anticompetitive when they allow a monopolist to harm competition by "foreclosing" potential sources of supply or distribution. For example, if a dominant widget manufacturer enters into exclusive-dealing arrangements with a significant number of large widget retailers, other widget manufacturers may be unable to secure an adequate distribution network. However, exclusive-dealing arrangements can also be procompetitive. For example, some exclusive-dealing agreements allow manufacturers to overcome free-rider problems by enabling them to train their distributors without fearing that the distributors will use that training to sell rival products. In other cases, exclusive-dealing arrangements may serve the procompetitive objective of allowing a company to guarantee a secure source of supply or distribution. Lower federal courts evaluate exclusive-dealing agreements under the Rule of Reason and accordingly weigh their anticompetitive harms against their procompetitive benefits. In conducting this analysis, courts have required plaintiffs to demonstrate that a challenged exclusivity provision resulted in "substantial foreclosure" of supply or distribution. The exclusive-dealing case law does not provide definitive guidance on the degree of foreclosure that qualifies as "substantial," as courts have varied considerably in the degree of foreclosure that they consider unlawful. However, an author of the leading antitrust treatise has argued that single-firm foreclosure of less than 30% is unlikely to harm competition. In addition to requiring that plaintiffs demonstrate substantial foreclosure, courts have evaluated a range of other factors in exclusive-dealing cases, including the duration of specific exclusivity provisions, the strength of the defendant's procompetitive justification for the provisions, whether the defendant has engaged in coercive behavior, and the use of exclusive-dealing agreements by the defendant's competitors. The application of exclusive-dealing doctrine to Big Tech markets is discussed in greater detail in " Android: Tying and Exclusive Dealing " and " Google AdSense: Exclusive Dealing " infra . Section 7 of the Clayton Act: Mergers and Acquisitions While Section 2 of the Sherman Act is concerned with unilateral exclusionary conduct, Section 7 of the Clayton Antitrust Act of 1914 prohibits mergers and acquisitions that may "substantially lessen" competition. Section 7 applies to both "horizontal" mergers between competitors in the same market and "vertical" mergers between companies at different levels of a distribution chain. In evaluating horizontal mergers, the DOJ and FTC typically evaluate the merged firm's market share and the resulting level of concentration in the relevant market, in addition to any efficiencies that the combined company will likely realize as a result of the proposed merger. In contrast, vertical mergers may raise competition concerns when they involve a firm with significant power in one market entering an adjacent market, which may foreclose potential sources of supply or distribution and raise entry barriers by requiring the firm's potential competitors to enter both markets to be competitive. For example, if a dominant widget manufacturer acquires a widget retailer, it may have incentives to discriminate against competing widget retailers by charging them higher prices or refusing to deal with them altogether. As a result of this vertical discrimination, such a merger may force prospective widget retailers to also enter widget manufacturing to be competitive, raising entry barriers in the retail market. Despite these potential concerns with certain vertical mergers, the DOJ and FTC police such mergers far less aggressively than horizontal mergers, largely on the basis of academic work suggesting that vertical integration can result in significant efficiencies and only rarely threatens competition. However, whether the antitrust agencies should scrutinize vertical mergers more closely remains a subject of ongoing debate. The DOJ and FTC apply Section 7 by reviewing large proposed mergers before they are finalized, though the agencies also have the authority to unwind consummated mergers. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act), parties to certain large mergers and acquisitions must report their proposed transactions to the antitrust agencies and wait for approval before closing. If the agencies determine that a proposed merger threatens to "substantially lessen" competition, they can sue to block the merger or negotiate conditions with the companies to safeguard competition. Section 7 of the Clayton Act also gives the agencies the authority to challenge previously closed mergers that "substantially lessen" competition, though lawsuits to unwind consummated mergers have been "rare" since the enactment of the HSR Act. The application of Section 7 to Big Tech markets is discussed in greater detail in " Facebook " infra . Antitrust and Big Tech: Possible Cases Against the Big Four Applying the general legal principles discussed above to specific technology companies is a highly fact-intensive enterprise that will depend on the specific evidence that the DOJ and FTC uncover during their investigations. Moreover, the agencies have yet to publicly release details on the categories of conduct that they are evaluating in the course of their Big Tech inquiries, making it difficult to confidently assess the strength of antitrust cases against the relevant companies. With these caveats in mind, the following subsections discuss certain categories of conduct that the antitrust agencies may be investigating at each of the Big Four. Google Google is no stranger to antitrust scrutiny. The technology giantâwhich runs Google Search, licenses the Android mobile operating system, and owns a major online ad-brokering platform (AdSense)âhas found itself in the crosshairs of competition authorities several times over the past decade. In 2013, the FTC concluded a wide-ranging investigation into the company's business practices, including its alleged discrimination against vertical rivals, copying of content from other websites, restrictions on advertisers' ability to do business with competing search engines, and exclusivity agreements with websites that used AdSense. While agency staff had recommended that the FTC bring a lawsuit challenging some of these activities, the Commission unanimously declined to pursue such an action after Google committed to make certain changes to its business practices. In contrast, European antitrust authorities have pursued three separate investigations of Google that have each resulted in large fines. In June 2017, the European Commission (EC) fined Google 2.4 billion euros for antitrust violations related to Google Search's preferential treatment of the company's comparison-shopping service, Google Shopping. The EC later levied an additional 4.3 billion-euro penalty in July 2018 for tying and exclusive-dealing arrangements related to Android. And in March 2019, the EC imposed a further 1.49 billion-euro penalty for exclusive- and restrictive-dealing agreements involving AdSense. While the focus of the DOJ's inquiry into Google's conduct remains somewhat obscure, the investigation is likely to implicate some of the same practices that have occupied the attention of European antitrust authorities. The subsections below discuss these issues in turn. Google Search: Refusals to Deal and Essential Facilities Google Search's allegedly preferential treatment of Google content has long been the subject of government investigations and academic discussion. The basic concern of these "search bias" allegations is the familiar worry about vertically integrated monopolists harming competition by discriminating against rivals who depend on a monopolized input or distribution channel. According to some critics, Google Search has monopoly power in the market for general-purpose ("horizontal") online searchâpower that Google has used to harm competition in the markets for various forms of specialized ("vertical") search by privileging its own vertical properties over those of its downstream competitors. The FTC evaluated these "search bias" complaints during its 2011-2013 investigation, which examined whether Google unfairly promoted its own vertical properties like Google Maps, Google Local, and Google Trips over competitors like MapQuest, Yelp, and Expedia. Specifically, these complaints alleged that Google Search privileged Google's vertical content by (1) introducing a "Universal Search" box that prominently displayed that content above rival websites, and (2) manipulating its search algorithms to demote vertical competitors in its search results. However, the FTC ultimately declined to pursue a lawsuit related to these practices after concluding that Google's "primary goal" in privileging its own content was to quickly answer users' search queries and improve the quality of its search results. In contrast, the EC concluded in June 2017 that Google's preferential treatment of Google Shopping violated EU antitrust law by harming competition in the market for comparison-shopping services. If the DOJ were to reevaluate Google's alleged search bias, it would face the threshold question of whether Google in fact possesses monopoly power in the market for horizontal search. During the FTC's previous investigation, agency staff concluded that horizontal search "likely" constituted a properly defined antitrust market and that Google had monopoly power in that market in light of its 71% market share. More recent estimates place Google's share of the horizontal search-engine market even higher. Moreover, certain academic reports on digital competition suggest that Google Search may be protected by significant entry barriers in the form of high fixed costs and access to the "big data" necessary to develop accurate search algorithms. However, several commentators have disputed the proposition that Google Search has monopoly power. Some of these observers have argued that the relevant market in an antitrust lawsuit based on Google's alleged "search bias" would be larger than the market for horizontal search, because users of horizontal search engines have reasonable alternatives to obtain information on the internet, including websites like Facebook, Twitter, and Amazon. Some skeptics have also argued that even if horizontal search is a properly defined antitrust market, Google's large share of that market does not necessarily give it monopoly power. According to these commentators, the low costs that consumers incur in switching to alternative search engines and the ability of those competing search engines to immediately increase "output" cast doubt on the claim that Google has monopoly power. If the DOJ could establish that Google has monopoly power, it would then need to show that Google's allegedly preferential treatment of its vertical properties represents an anticompetitive abuse of that power. Such a showing may be difficult under existing monopolization doctrine. In Aspen Skiing , the Supreme Court held that a monopolist's refusal to deal with a competitor can violate Section 2 where the evidence suggests that the refusal was motivated by a desire to sacrifice short-term profits in order to eliminate the competitor from the market. In that case, the Court held that a jury could have reasonably found such a desire because the defendant had terminated what was presumably a profitable course of dealing with its rival and refused to sell its daily ski tickets to the rival at prevailing retail prices. However, in Trinko , the Court narrowly construed Aspen Skiing , describing it as "at or near the outer boundary" of Section 2 liability. The Trinko Court proceeded to reject refusal-to-deal claims because the defendant in that case had not ceased a previous course of dealing or refused to sell its competitors a product that it sold to the public. The Court's decision in Trinko makes a refusal-to-deal case against Google difficult for several reasons. First, Google did not have previous courses of dealing with the websites that received high placement in its search results before the company implemented its allegedly discriminatory policies. While Google's search algorithm ranked these websites highly before this alleged discrimination, the websites did not pay Google for their high placement. Moreover, even if Google's relationships with these websites qualify as established courses of dealing, it is unlikely that Google's termination of those dealings involved a sacrifice of short-term profits that the company intends to recoup with long-term monopoly prices. Instead, Google's decision to give its own content premium placement likely maximizes the company's short-term profits by generating more user clicks, even if such actions also harm its vertical competitors. As a result, the factors that Trinko appears to have identified as necessary conditions for a refusal-to-deal claim would likely be absent in a case challenging Google's alleged search bias. A lawsuit challenging Google's vertical discrimination would also face difficulties under the essential-facilities doctrine. First, it is unclear whether high placement in Google's search results represents an "essential" facility. One court has held that a facility can qualify as "essential" when the denial of its use "inflicts a severe handicap on potential market entrants." However, plaintiffs must show more than mere "inconvenience" in order to prevail on an essential-facilities cause of action, and courts have accordingly rejected Section 2 claims when plaintiffs had reasonable alternatives to the relevant facility. While premium placement in Google's search results was likely an important benefit for some of Google's vertical rivals, it is uncertain whether such placement would qualify as "essential" under these standards given the other ways in which vertical search engines can reach potential customers. Moreover, it is unlikely that a plaintiff could demonstrate that Google can "feasibly" share this allegedly essential facility. As one commentator has argued, only one website can receive the highest ranking in Google's search results, meaning that Google cannot give top placement to its own vertical properties and their competitors. Finally, Google may be able to identify legitimate business reasons for giving its own content premium placement. After its 2011-2013 investigation of Google's search bias, the FTC declined to pursue a lawsuit on the grounds that the company's use of the "Universal Search" box and privileging of its own content were motivated by a desire to quickly answer users' search queries. Google is therefore likely to rely on similar arguments in any actions challenging its search practices. Android: Tying and Exclusive Dealing In addition to evaluating Google's alleged search bias, the DOJ may follow the lead of European antitrust authorities in investigating the company's practices involving its Android mobile operating system. In a July 2018 press release announcing a record-setting antitrust fine, the EC concluded that Google occupied a dominant position in three markets related to the Commission's Android investigation. First, the EC concluded that Google occupied a dominant position in the market for "general licensable smart mobile operating systems" through Android. Second, the EC determined that Google occupied a dominant position in the market for "app stores for the Android operating system" through its app store Google Play. Finally, the EC concluded that Google occupied a dominant position in the market for "general Internet search" through Google Search. After identifying these markets in which Google is dominant, the EC determined that Google had abused its monopoly positions by engaging in three separate categories of behavior: First , the EC concluded that Google illegally "tied" the Google Search app and Google Chrome web browser to the Google Play store. Specifically, the EC determined that Google harmed competition in the online-search market by requiring mobile device manufacturers who pre-install Google Play to also pre-install Google Search and Google Chrome (which uses Google Search as its default search engine). According to the EC, this type of mandated pre-installation can create a "status quo bias" that discourages consumers from downloading competing search engines and web browsers. Second , the EC concluded that Google made illegal payments to certain large device manufacturers in exchange for their agreement to exclusively pre-install Google Search on all of their Android devices. Third , the EC concluded that Google illegally obstructed the development and distribution of competing Android operating systems by requiring that device manufacturers who pre-install Google Play and Google Search refrain from selling any devices that ran alternative versions of Android that Google had not approved ("Android forks"). Google is currently appealing the EC's decision. Tying. A DOJ lawsuit targeting Google's "tying" of Google Search and Google Chrome to Google Play would raise a number of complex issues. First, a court evaluating such a lawsuit would have to determine whether this conduct is per se illegal or instead subject to Rule-of-Reason scrutiny. As discussed, plaintiffs can establish a per se tying violation by demonstrating (1) the existence of two separate products, (2) that the defendant conditioned the sale of one product on the purchase the other product, (3) that the arrangement affects a "substantial volume" of interstate commerce, and (4) that the defendant has market power in the market for the tying product. However, courts have applied these requirements narrowly, and the D.C. Circuit held in Microsoft that the unique features of software platforms makes per se liability inappropriate for ties involving such platforms and related products. The general trend away from per se tying liability and the D.C. Circuit's Microsoft decision suggest that a court would likely evaluate Google's tying arrangements under the Rule of Reason. As an initial matter, it is unclear whether mandatory pre-installation of the relevant apps represents the type of "forced sale" necessary to trigger per se liability under the relevant case law. During its Android enforcement action, the EC contended that mandatory pre-installation had significant effects on consumer behavior by discouraging Android users from downloading alternative search engines and web browsers. However, this allegation is an empirical claim about a relatively novel business practice, and the Supreme Court has explained that per se antitrust liability is appropriate only when courts have sufficient experience with a challenged practice to conclude that it lacks significant redeeming virtues. Limited judicial experience with the effects of mandatory pre-installation (as opposed to conditional sales ) may accordingly counsel against per se liability for Google's Android ties. Moreover, this hesitance to extend per se antitrust rules to novel business arrangements caused the D.C. Circuit to conclude in Microsoft that ties involving software-platform products are subject to Rule-of-Reason scrutiny. While Google's Android ties differ from the ties at issue in Microsoft in certain respects, commentators have observed that a tying case against Google would raise issues that are "very similar" to those the D.C. Circuit confronted roughly two decades ago. As a result, a court evaluating Google's tying of Google Search and Google Chrome to Google Play may follow the D.C. Circuit and evaluate such conduct under the Rule of Reason. In balancing the anticompetitive harms of these ties against their procompetitive benefits under the Rule of Reason, courts will likely focus on the general concern that motivated the EC's enforcement actionânamely, the worry that Android users who find Google Search and Google Chrome pre-installed on their devices are unlikely to download and use alternative search engines. The magnitude of this concern is a fact-intensive question that will depend on the specific evidence concerning the effects of pre-installation that the DOJ can uncover. If the DOJ produces evidence that Google's tying arrangements harm competition, a Section 2 case will depend on the strength of the company's procompetitive justifications for these practices. During the EC litigation, Google argued that the relevant ties ultimately benefitted consumers because the revenue the company derived from increased use of Google Search by Android users allowed it to license Android to device makers for free. However, the EC rejected this claim and concluded that Google can monetize its investment in Android by other means. U.S. regulators and courts have the benefit of additional information on this issue. After the EC's decision, Google announced that instead of offering a suite of apps to device makers for free, it will charge manufacturers licensing fees for Google Play and certain other apps to make up for the revenue it previously earned as a result of the challenged tying arrangements. Some commentators have argued that this development raises questions about whether the EC's decision will ultimately benefit consumers, who may face higher device prices because of the new licensing fees. But the legal relevance of this argumentâthat a decision attempting to promote competition in one market (online search) will harm consumers in another market (mobile devices)âremains open to debate. In horizontal-restraint and merger cases, some courts have rejected the proposition that competitive harms in one market can be balanced against competitive benefits in another market. However, other courts have taken a different approach, concluding that it is appropriate to consider such cross-market tradeoffs in certain instances, including tying cases. Antitrust commentators also continue to debate whether and in what circumstances courts should balance harms in one market against benefits in another. As a result, it is difficult to predict whether a court would accept the argument that any harm caused by Google's tying arrangements in the market for online search should be balanced against benefits in the market for mobile devices. Antitrust regulators, by contrast, may engage in such balancing in deciding whether to bring a case, whether or not cross-market tradeoffs would be relevant during subsequent litigation. Exclusive Dealing. Like a potential tying case, a challenge to Google's exclusivity agreements with device manufacturers would depend on the specific facts the DOJ uncovers during its investigation. In evaluating any payments Google has made to U.S. device makers in exchange for their agreement to pre-install only Google Search, a court would likely assess the impact of pre-installation on consumer behavior, the share of the market "foreclosed" by such agreements, the ability of competing search engines to offer such payments, and the strength of Google's procompetitive justifications for the payments. Similarly, a court evaluating Google's requirement that device manufacturers who pre-install Google Play and Google Search refrain from selling any devices that run Android forks would apply the Rule of Reason and balance the anticompetitive harms of that restriction against its procompetitive benefits. On the "harm" side of the ledger, U.S. regulators might follow the EC in arguing that such a restriction obstructs the development of Android forks, which may serve as important channels for the distribution of search engines and other apps that compete with Google products. In contrast, Google may respond (as it argued in the EC litigation) that this restriction is necessary to prevent a "fragmentation" of the Android ecosystem in which consumers would impute the poor technical standards of nonapproved Android forks to Android. However, the EC rejected this argument after concluding that Google failed to produce evidence suggesting that Android forks would suffer from serious technical problems. U.S. antitrust regulators may also be able to rebut this "fragmentation" argument by demonstrating that Google could brand Android in a way that would adequately distinguish it from Android forks and thereby achieve the relevant procompetitive benefit by less restrictive means. Google AdSense: Exclusive Dealing Finally, the DOJ may be investigating Google's agreements with websites that use its ad-brokering platform AdSense, which connects advertisers with "publisher" websites seeking ad revenue. During the FTC's 2011-2013 investigation, agency staff concluded that clauses in these agreements that prohibited or restricted publisher websites from doing business with competing ad-brokering platforms violated Section 2. However, the FTC did not address this issue in announcing its unanimous decision not to charge Google with antitrust violations. In contrast, the EC concluded in March 2019 that similar clauses in Google's agreements with publisher websites violated EU antitrust law. In a press release announcing its conclusions, the EC identified three factual findings from its investigation: First , the EC found that from 2006-2009, some of Google's agreements with publisher websites contained "exclusivity" clauses prohibiting the websites from doing business with competing ad-brokering platforms. Second , the EC found that after 2009, Google began to replace these "exclusivity" clauses with "Premium Placement" clauses that required publisher websites to reserve the most visited and profitable spaces on their search results pages for ads brokered by AdSense. Third , the EC found that after 2009, some of Google's agreements with publisher websites required the websites to seek Google's written approval before making changes to the way that ads brokered by rival platforms were displayed, allowing Google to control how attractive those ads would be. The EC concluded that by engaging in these practices, Google used its dominant position in the market for "online search advertising intermediation" to illegally suppress competition. Google is currently appealing the EC's decision. The analysis of these sorts of agreements in a U.S. antitrust case would involve the same type of inquiry as an analysis of the Android exclusivity provisions discussed above. That is, in evaluating a challenge to these types of provisions, a court would likely assess the share of the market "foreclosed" by such agreements, the duration of the agreements, whether competing ad-brokering platforms enter into these types of contracts with publisher websites, and the strength of Google's procompetitive justifications for the challenged provisions. Amazon Commentators have identified a variety of competition-related issues surrounding Amazon. However, most of the antitrust discussion involving the e-commerce giant has concerned two general categories of conduct: discrimination against vertical rivals and predatory pricing. In addressing Amazon's alleged vertical discrimination, a number of analysts have focused on the company's dual role as both the operator of Amazon Marketplaceâa platform on which merchants can sell their products directly to consumersâand as a merchant that sells its own private-label products on the Marketplace. Some commentators have alleged that Amazon exploits this dual role by implementing policies that privilege its own products over competing products offered by other sellers. According to a 2016 ProPublica investigation, for example, Amazon has designed its Marketplace ranking algorithmâwhich determines the order in which products appear to consumersâto favor its own products and products sold by companies that buy Amazon's fulfillment services. Similarly, certain merchants have complained that Amazon has revoked their ability to use its Marketplace after deciding to move into the relevant markets with its own private-label products or products it distributes on behalf of other companies. Some observers have also raised the possibility that Amazon may engage in predatory pricing by selling certain products at below-cost prices to eliminate rivals. A number of these allegations involve Amazon's 2010 acquisition of Quidsiâthe parent company of the online baby-products retailer Diapers.com and several other online-retail subsidiaries. According to some commentators, Amazon aggressively cut its prices for baby products after Quidsi rebuffed its initial offer to purchase the company. When Amazon's below-cost prices began to impede Quidsi's growth, the company ultimately accepted Amazon's subsequent acquisition offer. And after the Quidsi acquisition, Amazon allegedly raised its prices for baby products. Other predatory-pricing allegations leveled against Amazon concern the company's sale of certain e-books. Specifically, some observers have argued that when it entered the e-book market in 2007, Amazon priced some categories of e-books below cost to eliminate potential competitors, ultimately securing 90% of the market by 2009. A monopolization case grounded in Amazon's alleged discrimination against third-party merchants would raise several issues. As a threshold matter, regulators bringing such a case would need to show that Amazon possesses monopoly power. While Amazon is significantly larger than its e-commerce rivals, most estimates place its share of the U.S. online retail market at below 50%. However, the company's share of a narrower market for online marketplaces connecting third-party merchants with consumers may be considerably larger. Moreover, reports indicate that Amazon has very large shares of the markets for online sales of certain categories of products, including home-improvement tools, batteries, skin-care products, and (as discussed) e-books. If regulators could show that Amazon has monopoly power in a properly defined antitrust market, they would then need to establish that Amazon used that power to harm competition. Such a showing may be difficult under existing refusal-to-deal doctrine for some of the reasons discussed above in connection with Google's alleged search bias. As discussed, in Trinko , the Supreme Court rejected Section 2 claims where it was unable to infer that a monopolist's refusal to deal with a competitor involved a desire to sacrifice short-term profits to eliminate the competitor from the market. Specifically, the Court was unable to discern such an intent because the monopolist in Trinko (unlike its counterpart in Aspen Skiing ) had not terminated a previous course of dealing with the competitor or refused to sell the competitor a product that it offered to the public. The Court's reasoning in Trinko suggests that one type of refusal-to-deal claim against Amazon for its alleged vertical discrimination would be unlikely to succeed. If such a claim concerned Amazon's preferential ranking of its own private-label products on its Marketplace, it would be difficult to demonstrate that the challenged practice involves a sacrifice of short-term profits. Rather, just as Google likely maximizes its short-term profits by ranking its own vertical properties above those of competing websites, Amazon likely maximizes its short-term profits by giving its private-label products premium placement. A claim targeting this type of vertical discrimination is also unlikely to be viable under the essential-facilities doctrine, because Amazon cannot feasibly share access to the allegedly "essential" facility of top placement in its Marketplace product rankings. In contrast, a refusal-to-deal claim premised on Amazon's decision to revoke certain merchants' ability to use its Marketplace altogether may present courts with a closer question. Such an action could involve termination of a previously profitable course of dealing, which can suggest an intent to sacrifice short-term profits in order to eliminate competitors. This conduct may also provide the basis for an essential-facilities claim, as one commentator has argued that Amazon's Marketplace is dominant enough in certain online-retail markets to justify the conclusion that it qualifies as "essential" under the case law. While a court's assessment of this argument would depend on a fact-intensive evaluation of the alternatives available to specific categories of third-party sellers, it is conceivable that lack of access to Amazon's Marketplace would inflict a "severe handicap" on merchants in at least some online-retail markets. As a result, Amazon's outright termination of profitable relationships with certain third-party merchants may raise harder questions about the application of Section 2 doctrine. Amazon may also be vulnerable to predatory-pricing claims. To the extent that commentators have accurately characterized the conduct surrounding the company's acquisition of Quidsi, Amazon may have engaged in below-cost pricing and exhibited a "dangerous probability" of recouping its losses by eliminating a key competitor from the market for online sales of certain baby products. However, other predatory-pricing allegations against Amazon may raise more complicated issues. Amazon may be able to defend certain predatory-pricing charges on the grounds that the company intended certain products to be "loss leaders" that induced customers to purchase other products at above-cost prices. A court's assessment of this defense would depend on a fact-intensive inquiry into the motivations behind Amazon's pricing of specific products. Facebook Most of the antitrust commentary directed toward Facebook has focused on its acquisitions of potential competitorsâin particular, its 2012 acquisition of the photo-sharing service Instagram and its 2014 acquisition of the messaging service WhatsApp. In a March 2019 letter to the FTC, the Chairman of the House Antitrust Subcommittee urged the Commission to examine whether these acquisitionsâwhich according to some estimates have resulted in Facebook owning three of the top four and four of the top eight social media applicationsâviolated Section 7 of the Clayton Act. Other legislators and commentators have echoed calls for regulators to unwind these acquisitions. The FTC appears to be taking these arguments seriously. In August 2019, the Wall Street Journal reported that Facebook's acquisition practices are a "central component" of the agency's investigation of the company. In addition to potentially focusing on the Instagram and WhatsApp deals, the Journal reported that the FTC could also be evaluating Facebook's 2013 acquisition of Onavo Mobile Ltd.âa mobile-analytics company that may have allowed Facebook to identify fast-growing social media companies and purchase them before they became competitive threats. Depending on the evidence that the FTC uncovers, Facebook's general acquisition strategy could plausibly serve as the basis for a Section 2 monopolization case to the extent that it suppressed competition. The success of a case to unwind some of Facebook's acquisitions may depend on an assessment of the relevant market in which Facebook competes. Because Facebook does not charge users of its social network, this inquiry would require regulators to confront difficult conceptual issues with defining zero-price markets. If the FTC views "social networks" or "social media platforms" as the relevant market in an action to unwind Facebook's key acquisitions, the strength of the agency's case would likely depend on the other companies that are included in the relevant market and the appropriate methodology for calculating market shares. Because estimates of Facebook's dominance vary widely based on differences in each of these factors, the company's market share would likely be vigorously litigated in an action to unwind its major acquisitions. However, regulators may seek to sidestep this process with direct evidence that the relevant acquisitions harmed competition. As discussed, while antitrust plaintiffs typically rely on indirect market-share evidence to show that a defendant has monopoly power, several courts have held that plaintiffs can also establish monopoly power with direct evidence of supra-competitive prices. One commentator has sketched a general outline of the form such direct evidence might take, arguing that Facebook began to "degrade" user privacy only after the disappearance of major rivals. While there is little case law on direct proof of monopoly power, such evidence of quality degradation abruptly following the elimination of key competitors could plausibly serve as the type of "natural experiment" that allows regulators to establish that Facebook has monopoly power without defining the precise boundaries of the market in which it operates. If the FTC could establish that Facebook's acquisitions had anticompetitive effects either directly or indirectly, a court would then need to weigh those harms against any merger-specific efficiencies that Facebook can identify. In defending an enforcement action, Facebook might argue that its large post-acquisition investments in the relevant companies have improved their performance and accordingly benefited consumers. However, the FTC may be able to rebut such a defense with evidence that these companies could have secured adequate funding through the capital markets or by showing that the anticompetitive harms of the acquisitions outweigh any investment-related benefits. Apple Like Google, Apple has faced antitrust claims related to its mobile-device software. Specifically, the iPhone maker has faced separate class-action lawsuits related to its design of the device's operating system, iOS. In these lawsuits, classes of customers who purchased iPhone apps through the company's App Store and app developers claim that Apple has illegally monopolized the market for iPhone apps by designing iOS as a closed system and installing security measures to prevent customers from purchasing apps outside of the App Store. In May 2019, the Supreme Court rejected Apple's contention that App Store customers lacked standing to challenge this conduct, allowing their lawsuit to proceed. While these cases will accordingly continue to work their way through the courts, the DOJ may also be contemplating a similar action challenging Apple's design of iOS. The outcome of these exclusionary-design cases against Apple will depend on the specific findings that emerge over the course of litigation. Like the Microsoft case, these lawsuits involve a fact pattern that appears to suggest strong prima facie evidence of anticompetitive harm. If "iPhone apps" represent a properly defined antitrust market, Apple's decision to design iOS in a manner that requires users to purchase apps only from the App Store limits competition in that market to one seller/distributor. Section 2 claims challenging this conduct would accordingly depend on Apple's procompetitive justification for its design choices and the proper standard for evaluating that justification. If a court were to follow the D.C. Circuit's approach to these questions, it would balance the anticompetitive harms of Apple's product-design choices against their procompetitive benefits. In contrast, a court following the more deferential standards applied by the Ninth Circuit in Tyco Health Care Group or the Second Circuit in Berkey Photo would likely side with Apple as long as the company could identify a plausible reason to conclude that the challenged design choices represent product improvements. Such a justification may involve claims that the relevant security measures improve iPhone users' overall experience by preventing them from downloading technically unsound apps from non-App Store sources. However, the precise form that this type of argument would take remains to be seen. The current circuit split on the appropriate analytical framework for exclusionary-design claims may be a factor that prompts the DOJ to bring its own lawsuit challenging Apple's design of iOS. Both of the pending lawsuits have been brought in the Ninth Circuit, which will presumably follow its defendant-friendly precedent in Tyco Health Care Group . If the DOJ were to pursue litigation against Apple, regulators may accordingly choose to sue in a different circuit with more favorable case law. Although it is still early days, a DOJ lawsuit that further entrenches the circuit split surrounding exclusionary-design analysis may ultimately cause the Supreme Court to step in and clarify the doctrine. Options for Congress While the antitrust action surrounding the Big Four is currently concentrated in the executive branch and the courts, digital competition issues have also attracted the interest of Congress, which may pursue legislation to address anticompetitive conduct by large technology companies. Such legislation could take two general forms. First, some commentators have proposed that Congress enact certain changes to existing antitrust doctrine to promote digital competition. Second, a number of lawmakers and academics have advocated legislation that would impose sector-specific competition regulation on large technology companies. The subsections below discuss each category of potential legislation in turn. Changes to Antitrust Law A number of commentators have proposed that Congress adopt certain changes to existing antitrust doctrine to promote competition in technology markets. These proposals include: Changes to Predatory-Pricing Doctrine . Some observers have proposed changes to predatory-pricing doctrine with an eye toward addressing the pricing practices of dominant technology firms like Amazon. Specifically, one commentator has criticized Brooke Group 's "recoupment" requirement on the grounds that it does not adequately deter predatory pricing by dominant online platforms. According to this line of criticism, Brooke Group 's requirement that plaintiffs demonstrate a "dangerous probability" of recoupment fails to account for dominant platforms' unique ability to persist in charging below-cost prices for years and employ difficult-to-detect recoupment strategies like price discrimination among different categories of customers. As a result, this commentator has advocated a presumption that below-cost pricing by dominant platforms qualifies as prohibited exclusionary conduct. Other academics have criticized the first Brooke Group requirement, which demands that predatory-pricing plaintiffs show that a monopolist charged below-cost prices. These commentators argue that pricing-cutting can be anticompetitive even when a firm prices its products above cost, especially in cases where a monopolist aggressively cuts prices in order to prevent a new rival from recovering its entry costs or realizing economies of scale. To address this concern, these observers contend that courts should evaluate whether challenged price-cutting strategies exclude potential entrants without screening predation claims with a price-cost test. Congress could accordingly remedy this alleged defect in current predatory-pricing doctrine with legislation eliminating the first Brooke Group requirement. Enhanced Merger Review for Dominant Technology Companies . Some commentators have advocated stricter scrutiny for mergers and acquisitions by dominant technology companies, including a rebuttable presumption that mergers and acquisitions between certain monopolist technology companies and their potential competitors are unlawful. A number of academics have also suggested that because promising technology startups often fall below the minimum-size thresholds that trigger DOJ and FTC review under the HSR Act, Congress should consider lowering or eliminating those thresholds for deals involving dominant technology companies. Enhanced Scrutiny of Product Design Decisions . Finally, some observers have argued that courts should be less deferential toward defendants' justifications of allegedly exclusionary product designs, arguing that product-design decisions are often "key elements" of large technology companies' business strategies. Congress could accordingly consider legislation to clarify the appropriate standards for evaluating exclusionary-design claims, perhaps by making clear that such claims are subject to full Rule-of-Reason scrutiny rather than the more permissive tests adopted by certain lower federal courts. Sector-Specific Regulation As discussed, academic commentators have argued that certain digital markets possess structural characteristics that advantage large incumbent firms. In some cases, dominant firms in these markets can enhance such entry barriers by making it difficult for consumers to "multi-home" or use complementary products offered by competitors, and courts evaluating challenges to these product-design choices hesitate to hold companies liable under existing antitrust doctrine. Moreover, vertically integrated technology monopolists do not face general nondiscrimination rules requiring them to deal evenhandedly with rivals in adjacent markets. Some analysts have accordingly argued that large technology platforms require sector-specific regulations to address these competition concerns. These proposed regulations include "data mobility" rules giving consumers greater ability to control their data and move it to competing platforms, "interoperability" standards requiring companies to minimize technical impediments to the use of complementary products, and nondiscrimination requirements prohibiting vertically integrated technology monopolists from discriminating against rivals who use their platforms. Congress could legislate such requirements, direct an existing federal agency to develop them through rulemaking, or create a new agency tasked with regulating the technology industry. A number of lawmakers and academics have also argued that the infrastructure-like features of certain digital services justify separation regimes prohibiting monopolists that provide those services from entering adjacent markets. Such separation regimes are not without precedent. Historically, Congress and federal regulators have imposed a variety of structural prohibitions limiting the lines of business in which certain categories of firmsâincluding railroads, banks, television networks, and telecommunications companiesâcan engage. Commentators have justified these separation regimes on the grounds that they eliminate conflicts of interest that lead companies in key infrastructure-like sectors to discriminate against their vertical rivals. While the nondiscrimination requirements discussed above represent one means of addressing this concern, categorical separation rules are an alternative to such requirements that may prove easier to administer. In March 2019, Senator Elizabeth Warren proposed one type of separation regime for dominant technology companies, arguing that large "platform utilities"âincluding "online marketplaces," "exchanges," and "platforms for connecting third parties"âshould be prohibited from owing companies that participate on their platforms. The Chairman of the House Antitrust Subcommittee has also expressed support for similar separation requirements. Congress may also be interested in broader separation regimes prohibiting dominant technology platforms from entering other types of markets. Specifically, many lawmakers have expressed concern about Facebook's announcement that it intends to develop a new cryptocurrency. These worries have generated a legislative proposal to prevent any large technology platform from entering the financial industry, with Members on the House Financial Services Committee circulating draft legislation titled the Keep Big Tech Out of Finance Act. This draft bill would prohibit "large platform utilities" from (1) affiliating with financial institutions, or (2) establishing, maintaining, or operating digital assets intended to be "widely used as a medium of exchange, store or value, or any other similar function.""
"Over the past decade, Google, Amazon, Facebook, and Apple ("Big Tech" or the "Big Four") have revolutionized the internet economy and affected the daily lives of billions of people worldwide. While these companies are responsible for momentous technological breakthroughs and massive wealth creation, they have also received scrutiny related to their privacy practices, dissemination of harmful content and misinformation, alleged political bias, andâas relevant hereâpotentially anticompetitive conduct. In June 2019, the Wall Street Journal reported that the Department of Justice (DOJ) and Federal Trade Commission (FTC)âthe agencies responsible for enforcing the federal antitrust lawsâagreed to divide responsibility over investigations of the Big Four's business practices. Under these agreements, the DOJ reportedly has authority over investigations of Google and Apple, while the FTC will look into Facebook and Amazon. The DOJ and FTC investigations into Big Tech will likely involve inquiries into whether the relevant companies have illegally monopolized their respective markets or engaged in anticompetitive mergers or acquisitions. Under Section 2 of the Sherman Act, it is illegal for a company with monopoly power to engage in exclusionary conduct to maintain or enhance that power. And under Section 7 of the Clayton Act, companies may not engage in mergers or acquisitions that "substantially lessen" competition. The scope of the market in which a defendant-company operates is a key question in both monopolization and merger cases. The Supreme Court has identified certain qualitative factors that courts may consider in defining the scope of relevant antitrust markets. The DOJ and FTC have also adopted a quantitative market-definition inquiry known as the "hypothetical monopolist" or "SSNIP" test, according to which a relevant antitrust market consists of the smallest grouping of products for which a hypothetical monopolist could profitably impose a 5% price increase. The application of this quantitative inquiry to certain zero-price technology markets may present courts and regulators with important issues of first impression. However, commentators have proposed a variety of methods by which regulators could assess the scope of the markets in which the Big Four operate. In addition to demonstrating that a defendant-company possesses monopoly power in a properly defined market, monopolization plaintiffs must show that the defendant engaged in exclusionary conduct to maintain or enhance that power. In investigating allegedly exclusionary behavior by the Big Four, antitrust regulators may be evaluating Google Search's alleged discrimination against Google's vertical rivals, certain tying and exclusive-dealing arrangements related to the company's Android mobile operating system, and exclusive and restrictive-dealing arrangements related to the company's ad-brokering platform; Amazon's alleged predatory pricing and discrimination against third-party merchants on its online marketplace; Facebook's allegedly anticompetitive pattern of acquiring promising potential competitors, including its acquisitions of the photo-sharing service Instagram and the messaging service WhatsApp; and Apple's decision to design its mobile-operating system to prevent customers from downloading iPhone apps from any source other than the company's App Store. While the antitrust action surrounding Big Tech is currently concentrated in the executive branch and the courts, digital competition issues have also attracted the interest of Congress, which may pursue legislation to address anticompetitive conduct by large technology companies. Specifically, some commentators have proposed that Congress adopt changes to certain elements of antitrust law to promote competition in technology markets, including modifications to predatory-pricing doctrine, exclusionary-design law, and merger review. In contrast, other commentators have advocated sector-specific competition regulation for large technology companies that would include data-portability rules, interoperability standards, nondiscrimination requirements, and separation regimes."
" Introduction Coal mining and production in the United States during in the 20 th century contributed to the nation meeting its energy requirements and left a legacy of unreclaimed lands. Prior to the enactment of the Surface Mining Control and Reclamation Act in 1977 (SMCRA; P.L. 95-87 ), no federal law had authorized reclamation requirements for coal mining operators to restore lands and waters affected by mining practices. Title IV of SMCRA established the Abandoned Mine Lands (AML) program to address the public health, safety, and environmental hazards at these legacy abandoned coal mining sites. The objective of reclamation under Title IV of SMCRA is to restore lands or waters adversely affected by past coal mining to a condition that would mitigate potential hazards to public health, safety, and the environment. The actions necessary to attain these objectives may vary from site to site depending on the nature of the hazards and the technical or engineering feasibility of reclamation alternatives to mitigate the hazards. The severity of the hazard would also determine the prioritization of funding for reclamation. Examples of reclamation activities include removing or stabilizing coal mining waste piles, re-contouring and re-vegetating affected lands, mitigating the potential for subsidence, filling voids or sealing tunnels, and treating acid mine drainage. The costs to complete reclamation at a particular site would depend on the scope and nature of actions necessary to mitigate the potential hazards and any technical or engineering challenges to implement the selected actions. The Abandoned Mine Reclamation Fund, established under Section 401 of SMCRA, provides funding to eligible states and tribes for the reclamation of surface mining impacts associated with historical mining of coal. Title IV of SMCRA applies only to sites that were abandoned or left unreclaimed prior to the enactment of SMCRA on August 3, 1977, and for which there is no continuing reclamation responsibility under other federal or state law. SMCRA also established the Office of Surface Mining Reclamation and Enforcement (OSMRE) in the Department of the Interior. OSMRE is the federal office responsible for administering SMCRA in coordination with eligible states and tribes. The balance of the Abandoned Mine Reclamation Fund is provided by fees collected on coal mining operators in coal producing states. The fee rates in current law are based on a per-ton fee for the volume of coal produced at a mine annually or the percentage value of the coal produced at a mine, whichever is less each year as determined by the Secretary of the Interior. SMCRA authorizes annual grants to eligible states and tribes for the reclamation of abandoned coal mining sites. SMCRA also authorizes two sources of federal financial assistance to three United Mine Workers of America (UMWA) coal mineworker health benefits plans and the UMWA pension plan. These federal payments augment employer contributions to these plans. Interest transfers from the Abandoned Mine Reclamation Fund have supported the UMWA health benefit plans since FY1996, supplemented by payments from the General Fund of the U.S. Treasury since FY2008. As amended in the 116 th Congress, SMCRA authorizes additional General Fund payments to support the UMWA pension plan. The coal reclamation fee collection authorization is set to expire at the end of FY2021 absent the enactment of legislation extending the sunset date. If the authority to collect reclamation fees is not reauthorized, SMCRA directs the remaining balance of the fund to be distributed among states and tribes receiving grants from the Abandoned Mine Reclamation Fund based on the FY2022 grant amounts. The FY2022 grant amounts would depend on the fees collected in FY2021, and payments from the fund would begin in FY2023, continuing annually until the balance has been expended. Given that scenario, reclamation grants to eligible states would continue for some years. This report discusses funding for eligible states and tribes, reclamation priorities, annual receipts and appropriations, reauthorization issues, and other related bills that would authorize the use of the existing balance of the fund. This report does not discuss issues associated with Title V of SMCRA, which authorized the regulation of coal mining sites operating after the law's enactment. SMCRA requires coal mining operators regulated under Title V to be responsible for providing financial assurance for completing site reclamation. Coal mining sites regulated under SMCRA after August 3, 1977, are ineligible for grants from the Abandoned Mine Reclamation Fund. If financial assurances are inadequate to meet reclamation needs, the availability of federal funding to pay reclamation costs would be subject to the enactment of legislation. Abandoned Mine Reclamation Fund Section 401 of SMCRA established the Abandoned Mine Reclamation Fund as a trust fund within the U.S. Treasury. As enacted in 1977, SMCRA originally did not authorize the Abandoned Mine Reclamation Fund as an interest-bearing trust fund. The Abandoned Mine Reclamation Act of 1990 amended SMCRA for various purposes and authorized the investment of the unexpended balance of the Abandoned Mine Reclamation Fund in U.S. Treasury securities. The portion of the balance available for investment in U.S. Treasury securities is the amount that the Secretary of the Interior determines is not needed to meet current withdrawals. Interest began accruing on the invested balance in FY1992. Coal Reclamation Fees Receipts credited to the Abandoned Mine Reclamation Fund are sourced from fees collected from coal mining operators based on coal production. The coal reclamation fee rates are authorized in Section 402 of SMCRA. The fees are specified in current law and based on a per-ton fee for the amount of coal produced at a mine annually or the percentage value of the coal produced annually at a mine, whichever is less each year as determined by the Secretary of the Interior. The fees are 28 cents per ton of coal produced by surface mining, 12 cents per ton of coal produced by underground mining, or 10% of the value of the coal, whichever is less. The fee for lignite coal is different from non-lignite coal and is 8 cents per ton or 2% of the value of the coal, whichever is less. Congress decreased the fee rates authorized in the original enactment of SMCRA to these fee rates in the 2006 amendments to SMCRA. Annual receipts credited to the Abandoned Mine Reclamation Fund from these fees therefore depend on the fee rates applied to the amount or value of coal production each year. SMCRA does not set or guarantee any particular amount of receipts on an annual basis. Regardless of the fee rates, this framework may result in receipts fluctuating annually with changes in the amount or value of coal production in the United States. Coal reclamation fees generally increased until FY2007, after which the trend in fee revenue decreased from FY2008 to FY2019. During these years, coal reclamation fees collected by OSMRE decreased by approximately 49% in nominal dollars (i.e., without adjusting for inflation) ( Figure 1 ). U.S. coal production declined during that same time period by approximately 34%. While the nominal coal reclamation fees collected peaked in FY2007, the inflation-adjusted value of the coal reclamation fees have generally decreased since FY1979. The extent to which the reduced fee rates in 2006 contributed to the decline in fee receipts during this time period would depend on whether the fee receipts were based on the tonnage or value of coal produced. Eligible Lands and Waters Section 404 of SMCRA limits eligible lands and waters affected by coal mining to those left abandoned or unreclaimed prior to August 3, 1977, and for which there is no continuing reclamation responsibility under other federal or state laws. U.S. territories, states, and tribes without such lands and waters are excluded from eligibility for grants from the Abandoned Mine Reclamation Fund. The reclamation and regulatory programs authorized in SMCRA apply only to coal production states and tribal lands, and coal has not been mined in all states, U.S. territories, and tribal lands. States and tribes with lands on which coal was mined prior to the enactment of SMCRA on August 3, 1977, with an OSMRE-approved reclamation program are eligible for grants from the Abandoned Mine Reclamation Fund pursuant to Section 401 of SMCRA. Reclamation Priorities SMCRA describes differing types and priorities of AML reclamation projects eligible for reclamation funding from the Abandoned Mine Reclamation Fund. Examples of eligible AML projects include the reclamation of land subsidence, vertical openings, hazardous equipment and facilities, dangerous highways, and acid mine drainage (AMD) that originated from historical coal mining operations. Section 403 of SMCRA directs the prioritization of AML reclamation projects under a tier of three categories: 1. Priority 1 projects involve the reclamation of lands and waters to protect public health, safety, and property from extreme danger. 2. Priority 2 projects involve the reclamation of lands and waters to protect public health and safety from adverse effects of coal mining practices. 3. Priority 3 projects involve the reclamation of lands and waters previously degraded by adverse effects of coal mining practices for the conservation and development of soil, water (excluding channelization), woodland, fish and wildlife, recreation resources, and agricultural productivity. The reclamation of Priority 2 projects may be similar in scope and nature as Priority 1 projects but generally present a lesser degree of danger. In some instances, the proximity of hazards and risks of AML lands to communities may elevate the risks to public health and safety in a way that similar circumstances would merit a lower priority if they occurred at a more isolated and remote location. However, proximity alone is not necessarily an indicator of risk if contamination may migrate from the mining site to an affected community. The geographic scope of the site may be larger than where the coal was mined, because it includes all the affected lands and waters. AMD causes persistent water quality impairment when minerals within coal are exposed to atmospheric oxygen and water, which causes a reaction generating sulfuric acid. The production of acid creates low-pH conditions in the water, enhancing the solubility of iron, sulfate, and other trace metals from the exposed ore. Those dissolved constituents may discharge to downgradient streams and water bodies and may generate secondary minerals within the stream and on the stream beds. Streams and other ecosystems impacted by AMD can become functionally impaired. States may consider reclamation projects to abate AMD water quality issues as a higher priority if that impaired water could pose a risk to public health. Section 402 allows states receiving grants from the Abandoned Mine Reclamation Fund to deposit up to 30% of their annual grants into an acid mine drainage abatement fund. The state may establish an acid mine drainage abatement fund in accordance with that state's law, and the monies in the fund are not subject to SMCRA's three-year limitation on expenditure and may accrue interest. SMCRA allows states to expend monies in their abatement fund without a time limit because water quality issues associated with AMD may persist for decades or longer. State and Tribal Reclamation Programs States and tribes with lands on which coal is mined may be eligible for annual grants from the Abandoned Mine Reclamation Fund to support the reclamation of abandoned coal mining sites within their respective jurisdictions. To be eligible for these federal funds, pursuant to Section 405 of SMCRA, states and tribes first must obtain OSMRE approval of their reclamation programs. OSMRE approval of a reclamation program depends upon the state or tribe demonstrating that it has developed its own requirements that do not conflict with the federal requirements but may be more stringent and that it has the ability to carry out these requirements in lieu of the federal government. OMSRE has approved mine reclamation programs for 25 states and three tribes. State Certification Pursuant to Section 411 of SMCRA, OSMRE may certify a state or tribe with an OSMRE-approved state reclamation program once it demonstrates that it has reclaimed all of its priority abandoned coal mining sites identified pursuant to Section 403. States and tribes may apply to OSMRE for certification, and the final determination is subject to notice in the Federal Register and public comment. Certified states and tribes may use annual grants for the reclamation of abandoned non-coal sites and other uses. Section 411 includes certain limitations. SMCRA prohibits certified states and tribes from spending annual payments on sites remediated under the Uranium Mill Tailings Radiation Control Act of 1978, as amended, and sites designated for remedial action pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (CERCLA). To date, OSMRE has certified five states and three tribes as having reclaimed all of their priority coal mining sites that were abandoned or unreclaimed prior to the enactment of SMCRA on August 3, 1977. A state with an OSMRE-approved state reclamation program that has not reclaimed all of its priority abandoned coal mining sites is an uncertified state . OSMRE provides annual grants to uncertified states from the Abandoned Mine Reclamation Fund for the reclamation of the priorities described under Section 403. Grants to Eligible States and Tribes For uncertified states, OSMRE administers grants from the Abandoned Mine Reclamation Fund. For certified states and tribes, OSMRE administers annual payments from the General Fund in lieu of the Abandoned Mine Reclamation Fund. OSMRE administers grants among eligible states and tribes based on a statutory formula to calculate their respective shares of annual coal reclamation fee receipts. OSMRE publishes grant distribution summaries on an annual basis. OSMRE administered grants to states and tribes for FY2019 are presented in Table 1 and Table 2 . The following sections describe the grants administered to eligible states and tribes. The Surface Mining Control and Reclamation Act Amendments of 2006 ( P.L. 109-432 , Division C, Title II, of the Tax Relief and Health Care Act of 2006) authorized General Fund payments to certified states and tribes beginning in FY2008 to focus the expenditure of coal reclamation fees on the reclamation of abandoned coal mining sites. The 2006 amendments also authorized permanent appropriations of coal reclamation fees for mine reclamation grants in FY2008 and subsequent fiscal years. Uncertified States Just over 80% of annual coal reclamation fee collections since FY2008 are authorized as permanent (mandatory) appropriations that are distributed to eligible uncertified states during the fiscal year following their collection. Section 402 of SMCRA authorizes the distribution of the fee collections credited to the Abandoned Mine Reclamation Fund based on a statutory formula that allocates to uncertified states: Uncertified State Share: shares of 50% of the coal reclamation fees collected within that state. Historic Coal Funds: shares of 30% of the fee collections based on historic coal production prior to the enactment of SMCRA on August 3, 1977. The historic coal payments are based on the total coal tonnage produced by each respective state prior to enactment. Coal reclamation fees collected in certified states and on tribal lands therefore affect the amount available in the Abandoned Mine Reclamation Fund for annual reclamation grants to uncertified states. Fees collected in certified states and on tribal lands are distributed to uncertified states as part of their historic coal payment. Minimum Program Make Up Funds: additional shares of the fee collections if necessary to guarantee that each uncertified state receives an annual grant of at least $3 million if its 50% state share payment and historic coal payment combined would not equal this threshold. The formula leaves 20% of the annual fee collections available for the minimum program make up funds and discretionary spending through annual appropriations to fund the activities of OSMRE to oversee and assist state mine reclamation programs and to administer the Abandoned Mine Reclamation Fund. Under Section 402, any amount of the 50% state share grant to an uncertified state not expended within three years of the date when the grant was awarded would become redistributed as historic coal payments, with the exception of the AMD abatement funds discussed earlier. The formula does not allocate any of the fee collections to support the UMWA health or pension benefit plans. The interest that accrues on the invested balance of the Abandoned Mine Reclamation Fund via an intergovernmental transfer from the General Fund is available to support UMWA health benefit plans. Direct payments from the General Fund supplement the interest for the UMWA health benefit plans. Additionally, the UMWA pension plan is eligible for General Fund payments, but it is not eligible to receive payments from the Abandoned Mine Reclamation Fund. See the discussion in "Federal Financial Assistance for UMWA Health and Pension Benefit Plans" later in this report. Section 401(f)(5)(B) of SMCRA authorized a four year "phase-in" period during FY2008-FY2011 for the newly established mandatory payments to uncertified states for their state share, historic coal, and minimum make up grants. During this period, grants to uncertified states were reduced by 50% for FY2008 and FY2009 and 25% for FY2010 and FY2011. Certified States and Tribes Section 411(h)(2) of SMCRA authorized certified states and tribes to receive annual payments from the General Fund equivalent to 50% of annual coal reclamation fees collected within their jurisdictions. The fees collected from coal mining operations in certified states, and on lands of certified tribes, are credited to the Abandoned Mine Reclamation Fund. However, as authorized in Section 411 of SMCRA, certified states and tribes receive their payments from the General Fund of the U.S. Treasury in lieu of the Abandoned Mine Reclamation Fund and may use these funds for addressing the impacts of non-coal mineral development. Unlike uncertified states, certified states and tribes are not eligible to receive historic coal payments or minimum program make up funds. Section 411(h)(3)(B) of SMCRA authorized a three-year "phase-in" period between FY2009 and FY2011 for annual payments to certified states and tribes. During those fiscal years, annual state and tribal share payments were reduced to 25% in FY2009, 50% in FY2010, and 75% in FY2011. OSMRE paid the total amount reduced during the three-year phase-in period to certified states and tribes in two equal payments from the General Fund in FY2018 and FY2019. Certified states and tribes would no longer receive these payments in FY2020 and subsequent fiscal years because they have been fully paid out. In 2012, Congress amended Section 411(h) of SMCRA to place an annual $15 million cap on payments to each certified state or tribe. The cap applied to both in lieu payments and prior balance payments (described below) to certified states and tribes. Congress increased the cap to $28 million for FY2014 and $75 million for FY2015 by amending Section 411(h) of SMCRA again in 2013. Wyoming was the only state whose payments were reduced in FY2013 and FY2014 because of the caps. The higher cap in FY2015 did not affect Wyoming's payment. No other certified state or tribe exceeded caps for any of these fiscal years. In 2015, Congress removed these caps on payments to certified states and tribes by amending Section 411(h) of SMCRA. This amendment also authorized a retroactive payment for amounts that were reduced under the caps. Wyoming received a one-time retroactive payment of approximately $242 million in FY2016. This retroactive payment was included in the total payment to Wyoming in FY2016 as reported in the FY2018 Office of Management and Budget (OMB) budget in addition to the annual in lieu payments to certified states and tribes for FY2016. Prior Balance Payments The majority of the unappropriated balance of the Abandoned Mine Reclamation Fund accumulated prior to the 2006 amendments. Prior to the enactment of the 2006 amendments to SMCRA, OSMRE distributed payments to both certified and uncertified states and tribes from the Abandoned Mine Reclamation Fund subject to annual appropriations. Annual appropriations were generally lower than annual coal reclamation fees collected by OSMRE prior to the 2006 amendments, resulting in an accumulation in the unappropriated balance of the Abandoned Mine Reclamation Fund. Section 411(h)(1) of SMCRA authorized "Prior Balance" payments equivalent to state and tribal share of the unappropriated balance of past coal reclamation fee receipts through annual federal payments to both uncertified and certified states and tribes from FY2008 through FY2014 from the General Fund of the U.S. Treasury. The Prior Balance payments were fully paid out by the end of FY2014, with the exception of the state of Wyoming (discussed above), which received a retroactive payment in FY2016 for amounts owed to the state because of statutory caps that were lifted. States and tribes no longer receive these prior balance payments. The accumulated balance of past coal reclamation fees collected prior to the 2006 amendments has remained credited to the Abandoned Mine Reclamation Fund and continues to accrue interest annually from investments in U.S. Treasury securities. Unfunded Reclamation Cost Estimates States and tribes report site specific information to OSMRE about the reclamation of eligible AML projects. OSMRE hosts the Abandoned Mine Land Inventory System (AMLIS) database that presents information on total eligible mine reclamation costs by state and tribe, which may be categorized by unfunded, funded, and completed costs. The costs to complete reclamation at a particular site would depend on the scope and nature of actions necessary to mitigate the potential hazards and any technical or engineering challenges to implement the selected actions. OSMRE tracks AML reclamation project costs under three separate categories to identify the costs of completed projects and to estimate funding needs for future projects: 1. "Unfunded Costs" are based on estimates by states and tribes to implement projects for which funding is not available or has not been approved by OSMRE. 2. "Funded Costs" are based on estimates by states and tribes to implement projects for which funding is available and for which OSMRE has approved the funds. 3. "Completed Costs" are the actual costs of projects upon completion that states or tribes report to OSMRE. According to AMLIS, the total unfunded costs for uncertified and certified states and tribes was approximately $12.4 billion as of January 21, 2020. Of that total amount, the total unfunded cost estimates for uncertified states were approximately $12 billion, representing roughly 97% of the remaining unfunded reclamation needs. Unfunded reclamation cost estimates depend on the number of unreclaimed sites and on the severity of the reclamation problems as defined by the "Priority" level, per Section 403, for each unclaimed site in the state ( Table 1 ). Uncertified states reported Priority 2 costs as approximately $7.5 billion, or approximately 62% of the total uncertified unfunded reclamation costs. The remaining 38% of the unfunded costs for uncertified states are associated with Priority 1 and Priority 3 issues. Uncertified states reported Priority 1 issues as the smallest portion of unfunded cost estimates, but these sites generally represent the most severe hazards and most urgent priorities. Uncertified states reported the total unfunded reclamation cost for Priority 1 sites as roughly $1.8 billion. Two states, Pennsylvania and West Virginia, reported combined unfunded reclamation costs as $8.4 billion, representing approximately 66% of the total unfunded reclamation costs reported for all uncertified states. Pennsylvania reported the highest unfunded reclamation costs of any state, as reclamation cost estimates exceed $5 billion. OSMRE periodically updates funding estimates for sites in the AMLIS inventory. Thus, the number of priority sites in each funding category may change periodically. Future funding requirements may change as unforeseen contamination and remediation may be discovered or arise. Recent congressional hearing testimony by a Pennsylvania state official describes the challenges state programs face when attempting to catalog AML issues: Identifying and categorizing AML sites was among the first objectives for the AML program at its outset, and many of the cost estimates contained in the federal eAMLIS inventory were developed when the sites were initially inventoried in the early to mid-1980s. With time, the scale and depth of the AML problem has become better understood. However, it is in the nature of AML's that previously unknown sites will continue to manifest (particularly those associated with abandoned underground mines) and that known sites will continue to degrade, both of which increase the number of sites and the total cost to complete remaining AML reclamation work. With advancements in technology, the collection of more complete maps and mining records, and increased awareness and identification of these sites by local residents, many additional AML hazards have been and will continue to be identified and added to the AML inventory. Annual reclamation grants to states and tribes are based on the statutory formula described previously, and these grants are not based on reclamation needs. For example, several uncertified states reported similar unfunded reclamation costs: Indiana, Illinois, Oklahoma, and Missouri. The FY2020 grants received by those states, however, varied between $2.82 million and $11.7 million. Comparing FY2020 grants to the total unfunded reclamation costs suggests that some states or tribes may require annual grants for additional years or decades to completely fund reclamation needs. For example, Kansas reported $810 million in unfunded reclamation costs while receiving the minimum program make up fund amount of $2.82 million in FY2020. States and tribes may identify additional reclamation needs post-certification ( Table 2 ). A Wyoming state official described the ongoing reclamation challenges that the state continues to manage under their AML program. According to his written testimony, he described the state's awareness of AML issues as improved since the state achieved certification in 1984: Wyoming became a certified state under Title IV on May 25, 1984. Wyoming became certified on the basis of the best available information at the time. Early work to develop the inventory was essentially done through "boots on the ground." As our understanding of historic mining in the state has improved our AML inventory has continued to grow. Federal Financial Assistance for UMWA Health and Pension Benefit Plans Eligible UMWA members (including family members) receive post-retirement health and pension benefits from one of three multiemployer health benefit plans and one multiemployer pension plan. These plans include the Combined Benefit Fund, the 1992 Benefit Plan, the 1993 Benefit Plan, and the 1974 UMWA pension plan. These plans are funded by premiums paid by employer contributions and two sources of federal financial assistance authorized under SMCRA. Section 402(h) authorizes transfers of interest from the Abandoned Mine Reclamation Fund to the UMWA health plans on an annual basis if the annual contributions from employers are not sufficient to cover liabilities for benefit coverage each year. Section 402(i) also authorizes supplemental payments from the General Fund of the U.S. Treasury on an annual basis if the interest that accrues on the balance of the Abandoned Mine Reclamation Fund is not sufficient to ensure benefit coverage each year. General Fund payments to the UMWA plans and to certified states and tribes combined are subject to a statutory cap of $750 million per year. Each of these sources is authorized in SMCRA as permanent appropriations that result in direct federal spending (i.e., mandatory spending not subject to discretionary spending controlled through annual appropriations acts). Figure 2 shows the transfers of monies from the Abandoned Mine Reclamation Fund and the General Fund to eligible states and tribes for AML reclamation projects and other uses and to the UMWA plans. Interest Transfers from the Abandoned Mine Reclamation Fund In response to rising concern in the early 1990s about the potential insolvency of UMWA health benefit plans, the Coal Industry Retiree Health Benefit Act of 1992 ( P.L. 102-486 , Title XIX, Subtitle C of the Energy Policy Act of 1992) authorized the annual transfer of interest from the Abandoned Mine Reclamation Fund to three UMWA health benefit plans beginning in FY1996. Like other federal trust funds invested in U.S. Treasury securities, the interest that accrues on the invested balance of the Abandoned Mine Reclamation Fund is derived from the General Fund of the U.S. Treasury through an intergovernmental transfer. Receipts from coal reclamation fees invested in U.S. Treasury securities serve as the basis for calculating the interest that accrues to the Abandoned Mine Reclamation Fund. However, the fees do not function as "principal" in the same manner as private investments. Because the interest is sourced from existing receipts in the General Fund, the interest does not increase total receipts in the U.S. Treasury. The interest payments to the UMWA health plans are supplemented by payments from the General Fund if the interest is insufficient. The General Fund is therefore the source of receipts within the federal budget for both the interest and the supplemental payments to support the UMWA health and pension benefit plans. The General Fund consists of receipts from individual and corporate income taxes and other miscellaneous receipts not dedicated to other accounts of the U.S. Treasury. None of the coal reclamation fees credited to the Abandoned Mine Reclamation Fund are available to fund the UMWA benefit plans in current law. Supplemental Payments from the General Fund of the U.S. Treasury If employer contributions and the interest accrued to the Abandoned Mine Reclamation Fund are not sufficient to ensure UMWA health benefit coverage each year, the 2006 amendments to SMCRA authorized permanent appropriations for supplemental payments from the General Fund to pay the balance of benefits that would otherwise not be covered. The amendments authorized permanent appropriations for these General Fund supplemental payments beginning in FY2008 and "each fiscal year thereafter" without a termination date. The supplemental payments from the General Fund have become the larger source of federal funding to help ensure health benefit coverage under the UMWA plans (see Figure 3 and Figure 4 ), as the benefit obligations of the plans have exceeded the availability of interest that annually accrues on the invested balance of the Abandoned Mine Reclamation Fund. Bipartisan American Miners Act of 2019 In the 116 th Congress, the Bipartisan American Miners Act of 2019 ( P.L. 116-94 ; Further Consolidated Appropriations Act, 2020, Division M) increased the availability of federal financial assistance to address the solvency of the UMWA health and pension benefit plans, subject to a new statutory funding cap to control federal direct spending for this purpose. The act amended Section 402(h) of SMCRA to expand the eligibility of the UMWA health benefit plans for interest transfers from the Abandoned Mine Reclamation Fund and General Fund supplemental payments. The act also amended Section 402(i) of SMCRA to authorize General Fund payments for the 1974 UMWA pension plan and increased the total spending cap on Title IV General Fund payments from $490 million to $750 million annually to help fund the UMWA pension plan. The 2006 amendments to SMCRA authorized General Fund supplemental payments for the UMWA health benefit plans beginning in FY2008 but no federal funding for the 1974 UMWA pension plan. The 2006 amendments limited the eligibility of the UMWA health benefit plans for federal funding based on beneficiaries enrolled to receive health benefits as December 31, 2006. Funding needs for the 1993 UMWA health benefit plan continued to increase after this cut-off date as additional beneficiaries enrolled in that plan in later years. Certain coal mining company bankruptcies after 2006 also affected health benefit coverage for other retirees. Subsequent amendments to SMCRA in the 114 th and 115 th Congresses expanded the populations of beneficiaries who could be eligible for federal payments to the UMWA health benefit plans. Prior to the Bipartisan American Miners Act, Section 402(h)(2)(C) of SMCRA limited General Fund supplemental payments for the 1993 UMWA health benefit plan based on funding needs to cover beneficiaries enrolled in that plan as of May 5, 2017 (with coverage retroactive to January 1, 2017) and retirees whose benefits were denied or reduced as a result of coal mining company bankruptcies commenced in 2012 and 2015. Since that time, funding needs to cover health benefits for additional populations of retirees have increased. The Bipartisan American Miners Act amended Section 402(h)(2)(C) of SMCRA again to expand the eligibility of the 1993 UMWA health benefit plan for General Fund supplemental payments to cover beneficiaries eligible as of January 1, 2019, and retirees whose benefits were denied or reduced as a result of coal mining company bankruptcies commenced in 2018 and 2019. This expansion of eligibility for federal funding to ensure health benefit coverage for these additional populations of beneficiaries may lead to increases in General Fund supplemental payments to the UMWA health benefit plans. The Bipartisan American Miners Act of 2019 also authorized annual General Fund payments to the 1974 UMWA pension plan to address the solvency of that plan. The act established a new cap of $750 million annually on the aggregate amount of General Fund payments to certified states and tribes, UMWA health benefit plans, and the UMWA pension plan combined. The cap serves as a mechanism to control federal direct spending from the U.S. Treasury. After in lieu payments to certified states and tribes and supplemental payments to the UMWA health benefit plans each fiscal year, the act authorizes any remaining amount within the $750 million annual cap to be transferred to the UMWA pension plan. If the aggregate annual certified state and tribal payments and the supplemental payment for the UMWA health plans would exceed $750 million in a fiscal year, the UMWA health plans would be reduced to the cap, and the UMWA pension plan would not receive a federal payment that fiscal year. SMCRA gives funding priority to certified state and tribal payments that would not be reduced by the $750 million annual cap unless the amount for this purpose alone otherwise would exceed the cap. Given that certified state and tribal payments are based on shares of coal reclamation fees, these payments would not reach the cap unless coal production in certified state and tribal lands were to rise several fold compared to recent fiscal years. Supplemental payments to UMWA health plans may vary depending on the availability of interest accrued on the unappropriated balance of the Abandoned Mine Reclamation Fund, the annual funding needs of the plans, and the amount available within the $750 million annual cap for supplemental payments. General Fund payments to the 1974 UMWA pension plan would also depend on how much funding is remaining each year within the $750 million annual cap after certified state and tribal payments and the supplemental payment to the UMWA health benefit plans. Title IV SMCRA Appropriations: FY2008-FY2020 Appropriations from the Abandoned Mine Reclamation Fund include uncertified state shares, historic coal funds, minimum program make up funds, interest transfers to UMWA health benefit plans, and OSMRE administrative program funding ( Figure 3 and Figure A-1 ). Annual grants to uncertified states from the Abandoned Mine Reclamation Fund are permanent appropriations except for the OSMRE program funding, which Congress provides to OSMRE through annual appropriations. Total appropriations from the Abandoned Mine Reclamation Fund from FY2008 to FY2020 have totaled approximately $3.1 billion ( Table 3 ). Permanent appropriations from the General Fund of the U.S. Treasury include in lieu state share payments to certified states and tribes and UMWA supplemental payments. The General Fund also provided prior balance payments to certified states and tribes and uncertified states in several installments from FY2008 through FY2014, with a retroactive payment to the state of Wyoming in FY2016 (See the discussion of "Prior Balance Payments" earlier in this report). From FY2008 to FY2020, General Fund payments authorized in Title IV of SMCRA totaled approximately $6.0 billion ( Table 3 ). Appropriations vary from year to year based on statutory requirements (such as the phase-in reductions and payments), the amount of coal fees collected in a given year (which determine the amount available for state and tribal payments), and the amount of supplement payments required for UMWA health benefit plans ( Figure 4 ). The Bipartisan American Miners Act of 2019 authorized annual payments from the General Fund to the UMWA pension plan retroactively back to FY2017 and subsequent fiscal years, among other provisions. The FY2020 payment of $1.6 billion to the UMWA pension plan included cumulative payments from FY2017 through FY2020. The amount available for each of these fiscal years was subject to the $750 million annual cap and was based on the remainder within the cap after the certified state and tribal payments and the supplemental payments for the UMWA health benefit plans. The $1.6 billion payment to the UMWA pension plan in FY2020 was the largest annual General Fund payment authorized under Title IV of SMCRA ( Figure 4 ). For FY2021 and subsequent fiscal years, General Fund payments to certified states and tribes and the UMWA health and pension benefit plans will remain subject to the $750 million annual cap. Certified state and tribal payments would cease after FY2022 in current law absent the reauthorization of coal reclamation fees upon which these payments are based. Since FY2008, supplemental payments to UMWA health benefit plans from the General Fund have contributed a greater amount than have interest transfers from the Abandoned Mine Reclamation Fund ( Table 3 ). Absent reauthorization of the coal reclamation fees, as the balance from the Abandoned Mine Reclamation Fund is paid down after FY2023, the interest payments would continue to have a relatively smaller contribution to UMWA health plans. Thus, the supplemental payments from the General Fund for the UMWA health plans would continue to contribute a larger share of contributions to the plans as the amount of interest payments decrease. From FY2008 to FY2020, UMWA health and pension plans received approximately $3.91 billion of the total $6.04 billion in General Fund payments authorized in Title IV of SMCRA ( Table 3 ). That amount was nearly twice the total amount of grants paid to uncertified states from the Abandoned Mine Reclamation Fund (approximately $2.03 billion from the aggregate of the uncertified state shares, historic coal funds, and minimum program make up funds for FY2008 to FY2020) for the reclamation of abandoned coal mining sites during that same time period. Whereas funding for reclamation grants is dependent on coal reclamation fee collections, most of the UMWA plan funding is tied to the $750 million annual cap on General Fund payments, which are not financed with these fees. OMB estimates that coal reclamation fee receipts would continue to decline through FY2021, after which time the fee collection authority expires in current law. The Budget Control Act of 2011 provides a measure to control federal spending by placing a percent reduction on permanent appropriations to remain within prescribed caps. The percent reduction may vary each year depending on how much of a reduction is needed to remain within the cap. Sequestration reductions apply to permanent appropriations from General Fund and Abandoned Mine Reclamation Fund permanent appropriations as of FY2013. Congress has also appropriated monies from the General Fund for the Abandoned Mine Land Reclamation Economic Development Pilot Program. These appropriations have been authorized in annual appropriations and are not authorized in Title IV of SMCRA. Reauthorization Issues and Related Legislation Congress previously reauthorized the fee under the Surface Mining Control and Reclamation Act Amendments of 2006, and that authorization is set to expire at the end of FY2021. Some Members of Congress have introduced legislation in the 116 th Congress that would reauthorize the coal reclamation fee and authorize funds from the existing balance of the Abandoned Mine Reclamation Fund for economic and community development. Various issues are discussed in the following sections. Fee Reauthorization Given that the balance of the Abandoned Mine Reclamation Fund is less than 20% of the estimated unfunded reclamation needs, Congress may consider whether and how to fund the remaining coal reclamation needs. Abandoned coal mining sites that remain unreclaimed are expected to continue to pose hazards to public health, safety, and the environment. If the coal reclamation fees are not reauthorized beyond FY2021, Section 401 of SMCRA directs the unappropriated balance of the Abandoned Mine Reclamation Fund to be distributed among eligible states over a series of fiscal years beginning in FY2023 based on what the state received in FY2022 as its share of fee collections from the prior year. Those payments would continue in that same amount each fiscal year thereafter until the balance of the fund is expended. In FY2020, OSMRE reported that the unappropriated balance of the Abandoned Mine Reclamation Fund was approximately $2.2 billion. Reclamation grants to eligible states therefore would likely continue for some years, even if coal reclamation fees were not reauthorized after FY2021. If the fee collection is not reauthorized, the fees collected in FY2022 will dictate the annual rate of grants to eligible states starting in FY2023 until the unappropriated balance is expended. Those amounts are based on coal production or the value of the coal produced in FY2022, whichever is less. If the coal reclamation fees are not reauthorized, one potential option for Congress would be to appropriate from the General Fund to meet remaining needs after the balance of the Abandoned Mine Reclamation Fund is expended. Congress was faced with a similar issue in the debate over the reauthorization of Superfund excise taxes for the Superfund Trust Fund under CERCLA ( P.L. 96-510 ). From the enactment of CERCLA in 1980 through FY1995, the balance of the Superfund Trust Fund was provided by revenues from the collection of a Superfund excise tax on petroleum, chemical feedstocks, corporate income, transfers from the General Fund, and other receipts. The authority to collect those Superfund excise taxes expired in FY1995, leaving revenues from the General Fund as the primary source of money to the Superfund Trust Fund. Reauthorizing Legislation The Abandoned Mine Land Reclamation Fee Extension Act ( S. 1193 ), introduced in the 116 th Congress, would amend Section 402(b) of SMCRA, extending the fee collection authorization date until September 30, 2036. As introduced, S. 1193 would authorize OSMRE to collect coal reclamation fees under Section 402, and OSMRE would begin fixed payments from the unappropriated balance on the Abandoned Mine Reclamation Fund to uncertified states beginning in FY2023 based upon their FY2022 grants, according to Section 401(f)(2)(B). The Surface Mining Control and Reclamation Act Amendments of 2019 ( H.R. 4248 ) would amend Section 402(b) of SMCRA and Section 401(f) of SMCRA. This bill would extend the fee collection authorization date until September 30, 2036, and grants to eligible states and tribes would continue to be paid out annually according to the statutory formula until after FY2037. The bill would also increase the minimum payments to uncertified states from $3 million to $5 million and authorize compensation to uncertified states from the Abandoned Mine Reclamation Fund for the total amount reduced by sequestration between FY2013 and FY2018. In FY2020, 11 uncertified states together received approximately $21.9 million in minimum program make up funds, and 3 other uncertified states received less than $5 million. Raising the cap would increase payments to uncertified states receiving less than the current $3 million cap and may change the number of uncertified states eligible for minimum program make up funds. The extent to which more uncertified states become eligible would depend on future coal production in that state, coal production in certified states contributing to historic payments, and the value of coal generated. In the event the Congress enacts legislation reauthorizing the coal reclamation fee, the adequacy of those receipts to pay for the remaining unfunded reclamation costs would depend on domestic coal production, the duration of fee extension, and the emergence of additional reclamation needs. Given that the unfunded reclamation costs may be updated or subject to change based on the discovery or the occurrence of new health and safety or environmental issues, predicting the duration to reauthorize the fees to fund the remaining unfunded reclamation costs is challenging. Additionally, eligible states and tribes continuously update unfunded costs estimates as new problems are discovered or arise. Economic and Community Development Other legislation introduced in the 116 th Congress would use a portion of the unappropriated balance of the Abandoned Mine Reclamation Fund to provide funding for AML reclamation projects that promote economic and community development, as well as the purposes and priorities of reclamation described in Section 403 of SMCRA. However, some have argued expending funding for AML projects to prioritize economic and community development deviates from the original congressional intent of prioritizing the reclamation of lands and waters impacted by historic coal mining sites to address health and safety issues. Abandoned Mine Land Reclamation Economic Development Pilot Program Congress authorized the Abandoned Mine Land Reclamation Economic Development Pilot Program (AML Pilot Program) in the Consolidated Appropriations Act, 2016 to determine the feasibility of reclaiming abandoned coal mining sites to facilitate economic and community development. Congress provides funding for the AML pilot program through annual appropriations from the General Fund of the U.S. Treasury, not from the Abandoned Mine Reclamation Fund financed with coal reclamation fees. From FY2016 to FY2020, Congress has appropriated a total $540 million from the General Fund to the AML pilot program. For states and tribes that receive discretionary appropriations for the AML pilot program, those funds are in addition to the permanent appropriations as reclamation grants to eligible states and tribes from the Abandoned Mine Reclamation Fund. Annual appropriations have limited the use of AML pilot program grants to fund reclamation projects only in Appalachian counties of eligible states in areas where the project would have the potential to facilitate economic or community development. SMCRA authorizes the broader use of grants from the Abandoned Mine Reclamation Fund to fund reclamation projects in any counties within an eligible state. RECLAIM Act In the 116 th Congress, House and Senate versions of the Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More Act of 2019 (RECLAIM Act) have been introduced ( H.R. 2156 and S. 1232 ). Those bills would authorize $1 billion over five years from the existing unappropriated balance of the Abandoned Mine Reclamation Fund for the reclamation of abandoned coal mining sites as a means to facilitate economic and community development in states and tribes with eligible reclamation programs under Title IV of SMCRA. The RECLAIM Act would distribute $195 million annually to uncertified states based on historic payments and averaged state share grants. House and Senate versions of the RECLAIM Act differ by the allocation of these funds to uncertified states. For uncertified states to obligate RECLAIM monies on AML projects, the state would be required to demonstrate that those projects satisfy the reclamation priorities described in Section 403 and would contribute to future economic or community development. Both introduced versions of the RECLAIM Act would provide $5 million annually to certified states and tribes. Certified states and tribes would submit an application for funds, and OSMRE would determine the distribution of those funds based on the demonstration of needs. Neither introduced version of the RECLAIM Act would reauthorize the collection of the coal reclamation fees. RECLAIM grants to eligible states and tribes would be in addition to the annual grants paid to states and tribes. If the RECLAIM Act were enacted and the fee collection authority were not reauthorized, the unappropriated balance of the Abandoned Mine Reclamation Fund would be paid out sooner compared to a scenario where neither RECLAIM nor fee reauthorization legislation were enacted. Both House and Senate versions of the RECLAIM Act would increase the minimum program make up funds to uncertified states from the Abandoned Mine Reclamation Fund from $3 million to $5 million annually. Appendix."
"Coal mining and production in the United States during the 20 th century contributed to the nation meeting its energy requirements and left a legacy of unreclaimed lands. Title IV of the Surface Mining Control and Reclamation Act of 1977 (SMCRA, P.L. 95-87 ) established the Abandoned Mine Reclamation Fund. The Office of Surface Mining Reclamation and Enforcement (OSMRE) administers grants from the Abandoned Mine Reclamation Fund to eligible states and tribes to reclaim affected lands and waters resulting from coal mining sites abandoned or otherwise left unreclaimed prior to the enactment of SMCRA. Title IV of SMCRA authorized the collection of fees on the production of coal, which are credited to the Abandoned Mine Reclamation Fund. The use of this funding is limited to the reclamation of coal mining sites abandoned or unreclaimed as of August 3, 1977 (the date of SMCRA enactment). Title V of SMCRA authorized the regulation of coal mining sites operating after the law's enactment. Coal mining sites regulated under Title V are ineligible for grants from the Abandoned Mine Reclamation Fund. The balance of the Abandoned Mine Reclamation Fund is provided by fees collected from coal mining operators based on the volume or value of coal produced, whichever is less. The coal reclamation fee collection authorization in Title IV expires at the end of FY2021. If Congress does not reauthorize the collection of reclamation fees, SMCRA directs the remaining balance of the Abandoned Mine Reclamation Fund to be distributed among states and tribes receiving grants from the fund based on the FY2022 grant amounts. The FY2022 grant amounts would depend on the fees collected in FY2021, and payments from the fund would begin in FY2023, continuing annually until the balance has been expended. As of November 11, 2018, OSMRE reported that the unappropriated balance of the Abandoned Mine Reclamation Fund was approximately $2.3 billion. Reclamation grants to eligible states and tribes receiving grants from the Abandoned Mine Reclamation Fund would continue for some years until the balance is expended if coal reclamation fees are not reauthorized. The balance of the Abandoned Mine Reclamation Fund is several times less than the estimated unfunded reclamation costs. OSMRE recently reported estimates of the unfunded reclamation costs as $12.4 billion. Congress may consider whether and how to fund the remaining unfunded coal reclamation needs. If the fees are reauthorized, the adequacy of those receipts to pay the remaining unfunded reclamation needs would depend in part on decisions made by Congress (e.g., source of funds, duration of the fee extension, and fee rate). Additional factors include the status of domestic coal production, upon which the fees are based, and the potential emergence of additional reclamation needs. As introduced, H.R. 4248 and S. 1193 would amend SMCRA to extend the fee collection authorization at the current fee rates until September 30, 2036. SMCRA also authorizes federal financial assistance to United Mine Workers of America (UMWA) health and pension benefit plans for retired coal miners and family members who are eligible to be covered under those plans. Two sources of federal financial assistance to UMWA plans include interest transfers from the Abandoned Mine Reclamation Fund and supplemental payments from the General Fund of the U.S. Treasury. Should Congress not reauthorize the coal reclamation fees, as the balance from the Abandoned Mine Reclamation Fund is paid down, the interest transfers from the Abandoned Mine Reclamation Fund would make a relatively smaller contribution to the UMWA plans, increasing the reliance on General Fund payments for these plans. In the 116 th Congress, House and Senate versions of the RECLAIM Act ( H.R. 2156 and S. 1232 ) would authorize $1 billion over five years from the unappropriated balance of the Abandoned Mine Reclamation Fund for the reclamation of abandoned coal mining sites as a means of facilitating economic and community development in coal production states. Either of these bills would accelerate the expenditure of the remaining balance of the fund but would not reauthorize the reclamation fee."
" Introduction Throughout U.S. history, Congress has created advisory commissions to assist in the development of public policy. Among other contexts, commissions have been used following crisis situations, including the September 11, 2001, terrorist attacks and the 2008 financial crisis. In such situations, advisory commissions may potentially provide Congress with a high-visibility forum to assemble expertise that might not exist within the legislative environment; allow for the in-depth examination of complex, cross-cutting policy issues; and lend bipartisan credibility to a set of findings and recommendations. As Congress considers its range of responses to the coronavirus pandemic, the creation of one or more congressional advisory commissions is an option that could provide a platform for evaluating various pandemic-related policy issues over time. Past congressional advisory commissions have retrospectively evaluated policy responses, brought together diverse groups of experts, and supplemented existing congressional oversight mechanisms. Policymakers may determine that creating an advisory commission is unnecessary and instead prefer to utilize existing congressional oversight structures, such as standing or select committees, or already established oversight entities. This report provides a comparative analysis of five proposed congressional advisory commissions that would investigate various aspects of the COVID-19 pandemic. The five proposed commissions are found in H.R. 6429 (the National Commission on COVID-19 Act, sponsored by Representative Stephanie Murphy), H.R. 6431 (the Made in America Emergency Preparedness Act, sponsored by Representative Brian Fitzpatrick), H.R. 6440 (the Pandemic Rapid Response Act, sponsored by Representative Rodney Davis), H.R. 6455 (the COVID-19 Commission Act, sponsored by Representative Bennie Thompson), and H.R. 6548 (the National Commission on the COVID-19 Pandemic in the United States Act, sponsored by Representative Adam Schiff). The overall structures of each of the proposed commissions are similar in many respects, both to each other and to previous independent advisory entities established by Congress. Specifically, the proposed commissions would (1) exist temporarily; (2) serve in an advisory capacity; and (3) report a work product detailing the commission's findings, conclusions, and recommendations. That said, each particular proposed commission has distinctive elements, particularly concerning its membership structure, appointment structure, and time line for reporting its work product to Congress. This report compares the (1) membership structure, (2) appointment structure, (3) rules of procedure and operation, (4) duties and reporting requirements, (5) powers of the commission, (6) staffing issues, and (7) funding for each of the proposed COVID-19 commissions. Table 1 (at the end of this report) provides a side-by-side comparison of major provisions of the five proposals. Membership Structure Several matters related to a commission's membership structure might be considered. They include the size of a commission, member qualifications, compensation of commission members, and requirements for partisan balance. Size of Commission In general, there is significant variation in the size of congressional advisory commissions. Among 155 identified congressional commissions created between the 101 st Congress and the 115 th Congress, the median size was 12 members, with the smallest commission having 5 members and the largest 33 members. The membership structure of each of the five proposed commissions is similar to previous independent advisory entities created by Congress. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would each create a 10-member entity. H.R. 6455 would create a 25-member entity. Qualifications Past legislation creating congressional commissions has often required or suggested that commission members possess certain substantive qualifications. Such provisions arguably make it more likely that the commission is populated with genuine experts in the policy area, which may improve the commission's final work product. H.R. 6455 would provide that commissioners "shall be a United States person with significant expertise" in a variety of fields related to public health and public administration. H.R. 6440 , H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide "the sense of Congress" that commission members should be "prominent U.S. citizens" who are nationally recognized experts in a variety of fields relevant to the pandemic and response efforts. In addition, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 all prohibit the appointment of federal, state, and local government employees and officers. H.R. 6455 would prohibit federal employees from being commission members. Compensation of Commission Members Some congressional commissions have compensated their members. For example, the National Commission on Terrorist Attacks Upon the United States (9/11 Commission) and the Financial Crisis Inquiry Commission provided that commission members could be compensated at a daily rate of basic pay. Nearly all have reimbursed members for travel expenses. Those that have provided for commissioner compensation most frequently provided compensation at the daily equivalent of level IV of the Executive Schedule. Each of the five proposals would provide that commission members be compensated at a rate "not to exceed the daily equivalent of the annual rate of basic pay" for level IV of the Executive Schedule, "for each day during which that member is engaged in the actual performance of duties of the Commission." Members of three proposed commissions would receive travel expenses, including a per diem. Partisan Limitations Each proposal provides a limit on the number of members appointed from the same political party. H.R. 6455 would provide that not more than 13 of its 25 members may be from the same party. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that not more than 5 (of 10) members are from the same party. Most previous advisory entities created by Congress do not impose formal partisan restrictions on the membership structure. It may also be difficult to assess the political affiliation of potential members, who may have no formal affiliation (voter registration, for example) with a political party. Instead, most past advisory commissions usually achieve partisan balance through the appointment structure; for instance, by providing equal (or near-equal) numbers of appointments to congressional leaders of each party. Appointment Structure Past congressional commissions have used a wide variety of appointment structures. Considerations regarding appointment structures include partisan balance, filling vacancies, and the time line for making commission appointments. The statutory scheme may directly designate members of the commission, such as a specific cabinet official or a congressional leader. In other cases, selected congressional leaders, often with balance between the parties, appoint commission members. A third common statutory scheme is to have selected leaders, such as committee chairs and ranking members, recommend candidates for appointment to a commission. These selected leaders may act either in parallel or jointly, and the recommendation may be made either to other congressional leaders, such as the Speaker of the House and President pro tempore of the Senate, or to the President. Each of the five commission proposals would delegate most or all appointment authority to congressional leaders (including chamber, party, and committee leaders; see Table 1 for details). Additionally, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 provide for one appointment to be made by the President. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the President appoint the commission's chair. H.R. 6455 has its membership appointed by the chairs and ranking members of designated House and Senate committees, and the Joint Economic Committee. H.R. 6455 does not provide any executive branch appointments. Attention to the proper balance between the number of members appointed by congressional leaders and by other individuals (such as the President), or to the number of Members of Congress required to be among the appointees, or to the qualifications of appointees, can be significant factors in enabling a commission to fulfill its congressional mandate. In general, a commission's appointment scheme can impact both the commission's ability to fulfill its statutory duties and its final work product. For instance, if the scheme provides only for the appointment of Members of Congress to the commission, it arguably might not have the technical expertise or diversity of knowledge to complete its duties within the time given by statute. Similarly, if the appointment scheme includes qualifying provisos so specific that only a small set of private citizens could serve on the panel, the commission's final work product may arguably only represent a narrow range of viewpoints. None of the proposed COVID-19 commissions specify whether Members of Congress may serve on the commission. Partisan Balance in Appointment Authority Most previous congressional advisory commissions have been structured to be bipartisan, with an even (or near-even) split of appointments between leaders of the two major parties. By achieving a nonpartisan or bipartisan character, congressional commissions may make their findings and recommendations more politically acceptable to diverse viewpoints. The bipartisan or nonpartisan arrangement can give recommendations strong credibility, both in Congress and among the public, even when dealing with divisive public policy issues. Similarly, commission recommendations that are perceived as partisan may have difficulty gaining support in Congress. In some cases, however, bipartisanship also can arguably impede a commission's ability to complete its mandate. In situations where a commission is tasked with studying divisive or partisan issues, the appointment of an equal number of majority and minority commissioners may serve to promote partisanship within the commission rather than suppress it, raising the possibility of deadlock where neither side can muster a majority to act. Each of the five proposals employs a structure where leaders in both the majority and minority parties in Congress would make appointments. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide for five majority and five minority appointments, including one for the President. H.R. 6440 would include two each by the Senate majority leader, the Senate minority leader, and the Speaker of the House, with one appointment by the House minority leader and one by the President, and the chair appointed by the Speaker and vice chair appointed by the Senate majority leader. H.R. 6455 would have 12 majority and 12 minority appointments made by the 12 committee chairs and ranking members and one member jointly appointed by the chair and vice chair of the Joint Economic Committee. Vacancies All five proposals provide that vacancies on the commission will not affect its powers and would be filled in the same manner as the original appointment. Deadline for Appointments Three of the bills propose specific deadlines for the appointment of commissioners. H.R. 6429 and H.R. 6548 provide that appointments are made between specific dates in January or February 2021. Further, H.R. 6429 provides that commission members could be appointed in September 2020, if there is no longer a COVID-19 public health emergency in effectâas determined by the Secretary of Health and Human Servicesâas of August 31, 2020. H.R. 6440 would require all appointments be made by December 15, 2020. H.R. 6455 would require appointments to be made within 45 days after enactment. H.R. 6429 , H.R. 6440 , and H.R. 6548 would start the commission's work in early 2021, as the commission cannot operate without the appointment of members. H.R. 6429 , however would provide that the proposed commission's work would begin no later than October 31, 2020, if members are appointed in September 2020. H.R. 6431 does not specify a deadline for the appointment of members. Typically, deadlines for appointment can range from several weeks to several months. For example, the deadline for appointments to the Antitrust Modernization Commission was 60 days after the enactment of its establishing act. The deadline for appointment to the Commission on Wartime Contracting in Iraq and Afghanistan was 120 days from the date of enactment. The deadline for appointment to the 9/11 Commission was December 15, 2002, 18 days after enactment of the act. Rules of Procedure and Operations While most statutes that authorize congressional advisory commissions do not provide detailed procedures for how the commission should conduct its business, the statutory language may provide a general structure, including a mechanism for selecting a chair and procedures for creating rules. None of the five COVID-19 commission proposals contain language that directs the process for potentially adopting rules of procedure. For a comparison of each proposed commission's specified rules of procedures and operations, see Table 1 . Chair Selection Each bill provides for the selection of a chair and/or vice chair of the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the chair appointed by the President and the vice chair appointed by congressional leaders of the political party opposite the President. H.R. 6440 would have the chair appointed by the Speaker of the House (in consultation with the Senate majority leader and the House minority leader) and the vice chair appointed by the Senate majority leader (in consultation with the Speaker of the House and the Senate minority leader). H.R. 6455 would have the chair and vice chair chosen from among commission members by a majority vote of the commission, and would require the chair and vice chair to have "significant experience" in areas to be studied by the commission. Initial Meeting Deadline As with the timing of commission appointments, some authorizing statutes are prescriptive in when the commission's first meeting should take place. Three of the bills analyzed here provide specific time lines for the commission's first meeting. H.R. 6429 would require the first meeting to be no later than March 15, 2021, unless members are appointed in September 2020 (if no public health emergency exists). H.R. 6455 would require the first meeting within 45 days after the appointment of all commission members, which isâgiven the 45-day deadline for appointmentâeffectively a maximum of 90 days after enactment. H.R. 6548 would direct the commission to hold its initial meeting "as soon as practicable," but not later than March 5, 2021. H.R. 6431 and H.R. 6440 do not provide for an initial meeting deadline. Instead, they direct the commission to meet "as soon as practicable." Quorum Most commission statutes provide that a quorum will consist of a particular number of commissioners, usually a majority, but occasionally a supermajority. All five bills would provide for a quorum requirement. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would define a quorum as 6 (of 10) members. H.R. 6455 would provide that a quorum is 18 of 25 members (72%). Public Access All five commission bills would require commission meetings to be open to the public. Each bill would also require that reports be made publicly available. Formulating Other Rules of Procedure and Operations Absent statutory guidance (eithe r in general statutes or in individual statutes authorizing commissions), advisory entities vary widely in how they adopt their rules of procedure. In general, three models exist: formal written rules, informal rules, and the reliance on norms. Any individual advisory entity might make use of all three of these models for different types of decisionmaking. The choice to adopt written rules or rely on informal norms to guide commission procedure may be based on a variety of factors, such as the entity's size, the frequency of meetings, member preferences regarding formality, the level of collegiality among members, and the amount of procedural guidance provided by the entity's authorizing statute. Regardless of how procedural issues are handled, protocol for decisionmaking regarding the following operational issues may be important for the commission to consider at the outset of its existence: eligibility to vote and proxy rules; staff hiring, compensation, and work assignments; hearings, meetings, and field visits; nonstaff expenditures and contracting; reports to Congress; budgeting; and procedures for future modification of rules. None of the five COVID-19 commission proposals specify that the proposed commission must adopt written rules. FACA Applicability The Federal Advisory Committee Act (FACA) mandates certain structural and operational requirements, including formal reporting and oversight procedures, for certain federal advisory bodies that advise the executive branch. Three proposals ( H.R. 6429 , H.R. 6431 , and H.R. 6548 ) specifically exempt the proposed commission from FACA. Of the remaining two, FACA would also likely not apply to the commission proposed in H.R. 6455 because it would be appointed entirely by Members of Congress, although it only specifies that its final report is public, not whether it is specifically sent to Congress and/or the President. It is not clear that FACA would apply to the commission proposed in H.R. 6440 . Although it includes a presidential appointment and its report would be sent to both Congress and the President, its establishment clause specifies that the commission "is established in the legislative branch," and a super-majority of its members would be appointed by Congress. Duties and Reporting Requirements Most congressional commissions are generally considered policy commissionsâtemporary bodies that study particular policy problems and report their findings to Congress or review a specific event. General Duties All five of the proposed commissions would be tasked with duties that are analogous to those of past policy commissions. While the specific mandates differ somewhat, all proposed commissions are tasked with investigating aspects of the COVID-19 pandemic and submitting one or more reports that include the commission's findings, conclusions, and recommendations for legislative action. H.R. 6440 would specifically require the commission to avoid unnecessary duplication of work being conducted by the Government Accountability Office (GAO), congressional committees, and executive branch agency and independent commission investigations. Reports Each proposed commission would be tasked with issuing a final report detailing its findings, conclusions, and recommendations. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that the commission "may submit" interim reports to Congress and the President, but do not provide time lines on when those reports might be submitted. In each case, the interim report would need to be agreed to by a majority of commission members. H.R. 6431 would also require the commission to submit a report on actions taken by the states and a report on essential products, materials, ingredients, and equipment required to fight pandemics. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 also specify that final reports shall be agreed to by a majority of commission members. H.R. 6455 does not specify a vote threshold for approval of its report. None of the bills make specific provisions for the inclusion of minority viewpoints. Presumably this would leave each commission with discretion on whether to include or exclude minority viewpoints. Past advisory entities have been proposed or established with a variety of statutory reporting conditions, including the specification of majority or super-majority rules for report adoption and provisions requiring the inclusion of minority viewpoints. In practice, advisory bodies that are not given statutory direction on these matters have tended to work under simple-majority rules for report adoption. Report Deadlines H.R. 6429 would require a final report one year after the commission's initial meeting. H.R. 6431 and H.R. 6440 would require a final report not later than 18 months after enactment. H.R. 6455 would require a final report to be published not later than 18 months after the commission's first meeting. H.R. 6548 would require a final report by October 15, 2021. This deadline could be extended by 90 days upon a vote of no fewer than 8 (out of 10) commission members. The commission could vote to extend its final report deadline up to three times, and would be required to notify Congress, the President, and the public of any such extension. While such a deadline would potentially give the commission a defined period of time to complete its work, setting a particular date for report completion could potentially create unintended time constraints. Any delay in the passage of the legislation or in the appointment process would reduce the amount of time the commission has to complete its work, even with the opportunity for the commission to extend its own deadline up to three times. The length of time a congressional commission has to complete its work is arguably one of the most consequential decisions when designing an advisory entity. If the entity has a short window of time, the quality of its work product may suffer or it may not be able to fulfill its statutory mandate on time. On the other hand, if the commission is given a long period of time to complete its work, it may undermine one of a commission's primary legislative advantages, the timely production of expert advice on a current matter. A short deadline may also affect the process of standing up a new commission. The selection of commissioners, recruitment of staff, arrangement of office space, and other logistical matters may require expedited action if short deadlines need to be met. Report Submission Of the five proposed commissions, four ( H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 ) are directed to submit their reports to both Congress and the President. H.R. 6455 requires that the report is made public. Most congressional advisory commissions are required to submit their reports to Congress, and sometimes to the President or an executive department or agency head. For example, the National Commission on Severely Distressed Public Housing's final report was submitted to both Congress and the Secretary of Housing and Urban Development. Commission Termination Congressional commissions are usually statutorily mandated to terminate. Termination dates for most commissions are linked to either a fixed period of time after the establishment of the commission, the selection of members, or the date of submission of the commission's final report. Alternatively, some commissions are given fixed calendar termination dates. All five commission proposals would provide for the commission to terminate within a certain period of time following submission of its final report. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6455 would each direct the commission to terminate 60 days after the submission; H.R. 6548 specifies a time line of 90 days after submission. Commission Powers Each of the five proposals would provide the proposed commission with certain powers to carry out its mission (see Table 1 for specifics). One general issue for commissions is who is authorized to execute such powers. In some cases, the commission itself executes its powers, with the commission deciding whether to devise rules and procedures for the general use of such power. In other cases, the legislation specifically authorizes the commission to give discretionary power to subcommittees or individual commission members. Finally, the legislation itself might grant certain powers to individual members of the commission, such as the chair. Hearings and Evidence All five bills would provide the proposed commission with the power to hold hearings, take testimony, and receive evidence. All five commissions would also be provided the power to administer oaths to witnesses. Subpoenas Four of the bills would provide the commission with subpoena power. H.R. 6440 would not provide subpoena power to the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide that subpoenas could only be issued by either (1) agreement of the chair and vice chair, or (2) the affirmative vote of 6 (of 10) commission members. H.R. 6455 would require that a subpoena could only be issued by either agreement of the chair and vice chair or an affirmative vote of 18 (of 25) commission members. All four bills that would provide subpoena power contain substantially similar judicial methods of subpoena enforcement. Administrative Support All five of the bills would provide that the commission receive administrative support from the General Services Administration (GSA). The GSA provides administrative support to dozens of federal entities, including congressional advisory commissions. Each of the five bills would provide that GSA be reimbursed for its services by the commission. Each bill also provides that other departments or agencies may provide funds, facilities, staff, and other services to the commission. Other Powers Without explicit language authorizing certain activities, commissions often cannot gather information, enter into contracts, use the U.S. mail like an executive branch entity, or accept donations or gifts. All five bills direct that federal agencies provide information to the commission upon request. H.R. 6429 , H.R. 6431 , and H.R. 6548 would also provide that the commission could use the U.S. mails in the same manner as any department or agency, enter into contracts, and accept gifts or donations of services or property. Staffing The proposed COVID-19 commissions contain staffing provisions commonly found in congressional advisory commission legislation. Congressional advisory commissions are usually authorized to hire staff. Most statutes specify that the commission may hire a lead staffer, often referred to as a "staff director," "executive director," or another similar title, in addition to additional staff as needed. Rather than mandate a specific staff size, many commissions are instead authorized to appoint a staff director and other personnel as necessary, subject to the limitations of available funds. Most congressional commissions are also authorized to hire consultants, procure intermittent services, and request that federal agencies detail personnel to aid the work of the commission. Director and Commission Staff Four of the bills provide that the commission may hire staff without regard to certain laws regarding the competitive service; H.R. 6440 does not specifically exempt the commission from such laws. Four bills ( H.R. 6429 , H.R. 6431 , H.R. 6455 , and H.R. 6548 ) would authorize, but not require, the commission to hire a staff director and additional staff, as appropriate. Four proposals would limit staff salaries to level V of the executive schedule. Three of the bills would specifically designate staff as federal employees for the purposes of certain laws, such as workman's compensation, retirement, and other benefits. Detailees When authorized, some commissions can have federal agency staff detailed to the commission. All five bills would provide that federal employees could be detailed to the commission. Four bills would provide that the detailee would be without reimbursement to his or her home agency. H.R. 6440 would allow detailees on a reimbursable basis. Experts and Consultants All five bills would provide the commission with the authority to hire experts and consultants. Four of the bills limit the rate of pay for consultants to level IV of the Executive Schedule. H.R. 6440 does not specify a specific limit. Security Clearances Four bills would provide that federal agencies and departments shall cooperate with the commission to provide members and staff appropriate security clearances. H.R. 6440 does not contain a security clearance provision. Funding and Costs Commissions generally require funding to help meet their statutory goals. When designing a commission, therefore, policymakers may consider both how the commission will be funded, and how much funding the commission will be authorized to receive. Four of the five proposals specify a funding mechanism for the commission. How commissions are funded and the amounts that they receive vary considerably. Several factors can contribute to overall commission costs. These factors might include the cost of hiring staff, contracting with outside consultants, and engaging administrative support, among others. Additionally, most commissions reimburse the travel expenditures of commissioners and staff, and some compensate their members. The duration of a commission can also significantly affect its cost; past congressional commissions have been designed to last anywhere from several months to several years. Costs It is difficult to estimate or predict the potential overall cost of any commission. Annual budgets for congressional advisory entities range from several hundred thousand dollars to millions of dollars annually. Overall expenses for any individual advisory entity depend on a variety of factors, the most important of which are the number of paid staff and the commission's duration and scope. Some commissions have few full-time staff; others employ large numbers, such as the National Commission on Terrorist Attacks Upon the United States, which had a full-time paid staff of nearly 80. Secondary factors that can affect commission costs include the number of commissioners, how often the commission meets or holds hearings, whether or not the commission travels or holds field hearings, and the publications the commission produces. Authorized Funding Three of the bills ( H.R. 6429 , H.R. 6440 , and H.R. 6548 ) would authorize the appropriation of "such sums as may be necessary" for the commission, to be derived in equal amounts from the contingent fund of the Senate and the applicable accounts of the House of Representatives. H.R. 6429 and H.R. 6548 would provide that funds are available until the commission terminates. H.R. 6455 would authorize the appropriation of $4 million for the commission, to remain available until the commission terminates. H.R. 6431 does not include an authorization of appropriations. Comparison of Proposals to Create a COVID-19 Commission Table 1 provides a side-by-side comparison of major provisions of the five proposals. For each bill, the membership structure, appointment structure, rules of procedure and operation, duties and reporting requirements, proposed commission powers, staffing provisions, and funding are compared."
"Throughout U.S. history, Congress has created advisory commissions to assist in the development of public policy. Among other contexts, commissions have been used following crisis situations, including the September 11, 2001, terrorist attacks and the 2008 financial crisis. In such situations, advisory commissions may potentially provide Congress with a high-visibility forum to assemble expertise that might not exist within the legislative environment; allow for the in-depth examination of complex, cross-cutting policy issues; and lend bipartisan credibility to a set of findings and recommendations. Others may determine that the creation of an advisory commission is unnecessary and instead prefer to utilize existing congressional oversight structures, such as standing or select committees. This report provides a comparative analysis of five congressional advisory commissions proposed to date that would investigate various aspects of the COVID-19 outbreak, governmental responses, governmental pandemic preparedness, and the virus's impact on the American economy and society. The overall structures of each of the proposed commissions are similar in many respects, both to each other and to previous independent advisory commissions established by Congress. Specifically, the proposed commissions would (1) exist temporarily; (2) serve in an advisory capacity; and (3) report a work product detailing the commission's findings, conclusions, and recommendations. That said, each proposed commission has unique elements, particularly concerning its membership structure, appointment structure, and time line for reporting to Congress. Specifically, this report compares and discusses the (1) membership structure, (2) appointment structure, (3) rules of procedure and operation, (4) duties and reporting requirements, (5) commission powers, (6) staffing, and (7) funding of the five proposed commission structures. The five proposals are found in H.R. 6429 (the National Commission on COVID-19 Act), H.R. 6431 (the Made in America Emergency Preparedness Act), H.R. 6440 (the Pandemic Rapid Response Act), H.R. 6455 (the COVID-19 Commission Act), and H.R. 6548 (the National Commission on the COVID-19 Pandemic in the United States Act)."
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