Open Markets Institute Statement on Klobuchar Bill
September 19, 2017Last Thursday Senator Amy Klobuchar (D-MN) introduced two antitrust bills, “The Consolidation Prevention and Competition Promotion Act of 2017” and “The Merger Enforcement Improvement Act.” The Open Markets Institute applauds the Senator for recognizing that America has a monopoly problem and driving forward the conversation about how to address it. The bills build in important ways on the “Better Deal” agenda announced by Democratic Party leaders in July. Most fundamentally, the bills recognize that America’s current approach to antitrust law is not working. The bills also include several provisions that mark important departures from the current regime and would strengthen enforcement. For instance, the Open Markets Institute strongly supports the size threshold requirement for acquisitions. This change would make presumptively illegal some of the massive deals that have won antitrust approval in recent decades. OMI also supports the requirement that agencies acquire and analyze post-settlement data, a change that would provide an empirical basis for assessing how mergers approved by the agencies affected competition. Lastly, the Open Markets Institute agrees that reforming our antitrust regime requires greater agency accountability. In critical instances, the agencies have neglected their duty to protect and promote competition. While creating an independent competition advocate to supplement agency oversight is one option for checking agency negligence, we believe that the issue requires far greater thought and discussion. But the bills are also flawed in key ways. Most significantly, “The Consolidation Prevention and Competition Promotion Act of 2017” embraces the failed and ahistorical 1980s era idea that the purpose of antimonopoly law is to “protect American consumers.” As is clear from legislative history, the American people – acting through Congress – over the years passed a great variety of antimonopoly laws mainly to address a host of political economic goals, primary among these being the defense of democratic institutions from consolidations of power and the defense of the market structures that promote the distribution of opportunity and wealth. This continued embrace of the failed “consumer welfare” philosophy is especially disappointing given that leading experts such as Acting Assistant Attorney General for Antitrust Renata Hesse last year rejected “consumer welfare” as a goal of antitrust law, and that there is growing economic evidence that the “consumer welfare” philosophy has failed on its own terms to keep markets competitive. Resolving America’s monopoly crisis will require a policy framework up to the challenge. Senator Klobuchar’s bills are a partial step forward, but much more is required. We look forward to continuing to work with Senator Klobuchar and other members of Congress on these important issues.