New Legislation Aims to Give More Power to Antitrust Enforcers

Today, incoming head of the Senate antitrust subcommittee, Sen. Amy Klobuchar (D-MN) introduced the Competition and Antitrust Law Enforcement Reform Act. The contents of the bill seek to make antitrust violations easier to prove in court, but the overall thrust of the legislation reveals a fundamental misunderstanding of what drives innovation and best serves consumers.

Specifically, the legislation shifts the burden to dominant firms for proving mergers would not “create an appreciable risk of materially lessening competition.” This changing of the default from “presumed innocent until proven guilty” to its dead opposite is an erasure of due process that should offend everyone’s sense of justice. It’s the codification of the precautionary principle and the end of the permissionless innovation that has delivered so much benefit to consumers in the tech space. 

The proposal also relieves claimants of the burden of precisely defining the market in which the alleged anticompetitive behavior occurred. My colleague Ryan Young has written extensively on the challenges of defining markets correctly, but suffice it to say that this legislation is a step in the wrong direction. Additionally, the bill allows civil penalties and increases funding for the Department of Justice and the Federal Trade Commission, the twin antitrust policemen of the federal government.

But all the (taxpayer) money in the world won’t change the fundamental flaw in antitrust law—expecting antitrust officials to be all-knowing about what behavior is or is not pro-competitive. It is individuals in the marketplace who have the expertise and incentive to create goods and services for which consumers will be willing to pay. To varying degrees, bureaucrats lack the specific knowledge and self-interest to judge and predict which decisions will create value for consumers.

In her rollout of the proposed legislation, Sen. Klobuchar said, “Our laws have to be as sophisticated as those that are messing around with competition.” Those who favor markets over government meddling beg to differ. It’s simple, limited rules that allow consumers to benefit from maximum freedom and innovation in even a complex industry.

CEI will have more to say in defending that approach as Sen. Klobuchar holds hearings on her legislation throughout the coming year.