U.S. Department of Justice Creates Anticompetitive Regulation Task Force

On March 27, 2025, the U.S. Department of Justice launched the Anticompetitive Regulations Task Force.  The Task Force is soliciting public input concerning regulations that may hinder competition.  I wonder if IP-related laws will be examined.  The Press Release states:

Today, the Justice Department launches an Anticompetitive Regulations Task Force to advocate for the elimination of anticompetitive state and federal laws and regulations that undermine free market competition and harm consumers, workers, and businesses. The Antitrust Division has a long history of advocacy against laws and regulations that create unnecessary barriers to competition.  The Task Force will surge resources to these efforts and invite public comments to support the Administration’s mission to unwind laws and regulations that hinder business dynamism and make markets less competitive.    

“Realizing President Trump’s economic Golden Age will require unwinding burdensome regulations that stifle free market competition. This Antitrust Division will stand against harmful barriers to competition whether imposed by public regulators or private monopolists,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “We look forward to working with the public and with other federal agencies to identify and eliminate anticompetitive laws and regulations.”

On Jan. 31, President Trump signed Executive Order 14192 declaring “the policy of the executive branch” to be that federal agencies should “alleviate unnecessary regulatory burdens placed on the American people.” Consistent with this policy, on Feb. 19, President Trump signed Executive Order 14219 directing agencies to “initiate a process to review all regulations” and identify regulations that, among other things, “impose undue burdens on small businesses and impede private enterprise and entrepreneurship.” Consistent with longstanding practice, the Antitrust Division will support federal agencies’ deregulatory initiatives by sharing its market expertise on regulations that pose the greatest barriers to economic growth.

Regulatory capture is a well-studied phenomenon in which agencies become “captured” by special interests and big businesses, rather than serving the interests of the American people. But when regulations serve the few and impose undue burdens on small businesses, private enterprise, and entrepreneurs, they also harm competition and ultimately hurt American consumers, workers, and businesses. For example, regulations can increase compliance costs, preventing businesses from competing on a level playing field with powerful corporations. Regulations can also discourage or even intentionally prohibit small businesses and new products from entering markets and lowering prices for American families. In contrast, eliminating unnecessary anticompetitive regulations makes it easier for businesses to compete. More competition empowers the American people — not government regulators — to drive economic progress and innovation. When every American has a fair opportunity to enjoy the benefits of competitive free markets, every American has an opportunity to realize the American dream.

By identifying and working with state and federal agencies to revise or eliminate these laws and regulations, the Anticompetitive Regulations Task Force will contribute to making the American dream a reality. As a first step, the Antitrust Division will initiate a public inquiry to identify unnecessary laws and regulations that raise the highest barriers to competition. In particular, the Division will seek information from the public about laws and regulations that make it more difficult for businesses to compete effectively, especially in markets that have the greatest impact on American households, including:

• Housing: Americans spend more than one-third of their monthly income on housing, and the cost of owning or renting a home continues to rise. Laws and regulations in housing markets can contribute to these problems by making it more difficult for companies to build and ordinary Americans to rent or buy.
• Transportation: Laws and regulations in areas like airlines, rail, and ocean shipping can grant antitrust immunities, outright monopolies, or safe harbors for conduct that undermines competition. As a result, Americans pay more for travel, fuel, and a variety of other products.
• Food and Agriculture: By the end of the Biden-Harris Administration, grocery prices were 27% higher than at the end of the first Trump Administration. Eliminating unnecessary anticompetitive regulations will help farmers, growers, and ranchers increase the amount of food they produce and unlock lower prices for American consumers.
• Healthcare: Laws and regulations in healthcare markets too often discourage doctors and hospitals from providing low-cost, high-quality healthcare and instead encourage overbilling and consolidation. These kinds of unnecessary anticompetitive regulations put affordable healthcare out of reach for millions of American families.
• Energy: Reliable and affordable energy is essential to modern American life — whether in homes, businesses, manufacturing plants, schools, hospitals, sporting events, or data centers. Laws and regulations can undermine reliability and affordability by protecting incumbent electricity providers from competition or disruptive innovation.

The public will have 60 days to submit comments at www.Regulations.gov (Docket No. ATR-2025-0001), no later than May 26. Once submitted, comments will be posted to Regulations.gov. All market participants are invited to provide comments in response to this inquiry, including consumers, consumer advocates, small businesses, employers, trade groups, industry analysts, and other entities that are impacted by anticompetitive state or federal laws and regulations.

In addition to reviewing responses from the public, the Task Force will bring together attorneys, economists, and other staff from across the Division, together with interagency partners, to identify state and federal laws and regulations that unnecessarily harm competition. The Antitrust Division will then take appropriate action, including helping agencies revise or eliminate these regulations.

The Task Force will also consider other ways to advocate for the removal of anticompetitive laws and regulations. The Division routinely files amicus briefs and statements of interests in private litigation, and it will continue to do so to promote competition and oppose anticompetitive laws and regulations. The Division also provides comments on proposed legislation in the states on the request of state legislators. These efforts will continue with an eye toward protecting competition and interstate commerce in light of dormant Commerce Clause principles.

The Justice Department has a long history of serving as the Executive Branch’s chief competition advocate by working with agencies to identify and eliminate unnecessary regulations. In 2018, the Justice Department released a report on how regulations can harm competition. Following this report, the Justice Department submitted dozens of comments to federal agencies supporting efforts to eliminate unnecessary regulations and increase competition. For example, the Justice Department, in consultation with the Federal Trade Commission, submitted a comment opposing  regulations that would have protected incumbent electricity transmission companies from much-needed competition in energy markets across the country. The Justice Department filed comments aimed at making it easier for individuals and small businesses to navigate the federal government bureaucracy. The Justice Department also provided technical assistance and trainings to federal agencies to help them analyze how new and existing regulations might affect competition, or whether competition may be a better alternative to regulation altogether.

The Anticompetitive Regulations Task Force will continue these efforts, supporting ongoing efforts across the Trump Administration to unleash competition by eliminating unnecessary, burdensome, and wasteful government regulations. For more information on the Task Force, including contact information, see Anticompetitive Regulations Task Force page on the Division’s website.

US DOJ Sues Google for Anticompetitive Conduct in Advertising Practices

The U.S. Department of Justice has brought a competition suit against Google concerning its internet advertising practices.  The DOJ press release states:

Today, the Justice Department, along with the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia, filed a civil antitrust suit against Google for monopolizing multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act.

Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies, collectively referred to as the “ad tech stack,” that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers. Website publishers use ad tech tools to generate advertising revenue that supports the creation and maintenance of a vibrant open web, providing the public with unprecedented access to ideas, artistic expression, information, goods, and services. Through this monopolization lawsuit, the Justice Department and state Attorneys General seek to restore competition in these important markets and obtain equitable and monetary relief on behalf of the American public.

As alleged in the complaint, over the past 15 years, Google has engaged in a course of anticompetitive and exclusionary conduct that consisted of neutralizing or eliminating ad tech competitors through acquisitions; wielding its dominance across digital advertising markets to force more publishers and advertisers to use its products; and thwarting the ability to use competing products. In doing so, Google cemented its dominance in tools relied on by website publishers and online advertisers, as well as the digital advertising exchange that runs ad auctions.

“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said Attorney General Merrick B. Garland. “No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”

“The complaint filed today alleges a pervasive and systemic pattern of misconduct through which Google sought to consolidate market power and stave off free-market competition,” said Deputy Attorney General Lisa O. Monaco. “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers. This lawsuit marks an important milestone in the Department’s efforts to hold big technology companies accountable for violations of the antitrust laws.”

“The Department’s landmark action against Google underscores our commitment to fighting the abuse of market power,” said Associate Attorney General Vanita Gupta. “We allege that Google has captured publishers’ revenue for its own profits and punished publishers who sought out alternatives. Those actions have weakened the free and open internet and increased advertising costs for businesses and for the United States government, including for our military.”

“Today’s lawsuit seeks to hold Google to account for its longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads on the open internet,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Our complaint sets forth detailed allegations explaining how Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of driving out rivals, diminishing competition, inflating advertising costs, reducing revenues for news publishers and content creators, snuffing out innovation, and harming the exchange of information and ideas in the public sphere.”

Google now controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server); it controls the dominant advertiser tool that helps millions of large and small advertisers buy ad inventory (advertiser ad network); and it controls the largest advertising exchange (ad exchange), a technology that runs real-time auctions to match buyers and sellers of online advertising.

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Google’s anticompetitive conduct has included:

• Acquiring Competitors: Engaging in a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space;
• Forcing Adoption of Google’s Tools: Locking in website publishers to its newly-acquired tools by restricting its unique, must-have advertiser demand to its ad exchange, and in turn, conditioning effective real-time access to its ad exchange on the use of its publisher ad server;
• Distorting Auction Competition: Limiting real-time bidding on publisher inventory to its ad exchange, and impeding rival ad exchanges’ ability to compete on the same terms as Google’s ad exchange; and
• Auction Manipulation: Manipulating auction mechanics across several of its products to insulate Google from competition, deprive rivals of scale, and halt the rise of rival technologies.

As a result of its illegal monopoly, and by its own estimates, Google pockets on average more than 30% of the advertising dollars that flow through its digital advertising technology products; for some transactions and for certain publishers and advertisers, it takes far more. Google’s anticompetitive conduct has suppressed alternative technologies, hindering their adoption by publishers, advertisers, and rivals.

The Sherman Act embodies America’s enduring commitment to the competitive process and economic liberty. For over a century, the Department has enforced the antitrust laws against unlawful monopolists to unfetter markets and restore competition. To redress Google’s anticompetitive conduct, the Department seeks both equitable relief on behalf of the American public as well as treble damages for losses sustained by federal government agencies that overpaid for web display advertising. This enforcement action marks the first monopolization case in approximately half a century in which the Department has sought damages for a civil antitrust violation.

In 2020, the Justice Department filed a civil antitrust suit against Google for monopolizing search and search advertising, which are different markets from the digital advertising technology markets at issue in the lawsuit filed today. The Google search litigation is scheduled for trial in September 2023.

Google is a limited liability company organized and existing under the laws of the State of Delaware, with a headquarters in Mountain View, California. Google’s global network business generated approximately $31.7 billion in revenues in 2021. Google is owned by Alphabet Inc., a publicly traded company incorporated and existing under the laws of the State of Delaware and headquartered in Mountain View, California.

IPOs in the United States Drop

According to Ernst & Young and PwC, the number of IPOs and their value in the United States have dropped significantly from the similar time period from the prior year.  Interestingly, PwC notes that China's numbers of IPOs has remained relatively strong.  Cal Matters and others report that California's number of IPOs is very weak compared to the last year.  As pointed out by commentators, it seems to make sense to wait and see in this market--if you are able.  Notably, if IPOs as an exit strategy dry up, it makes acquisitions a much more important alternative.  It will be interesting to see the direction regulators in the United States take toward acquisitions--particularly in the tech space.  

Bipartisan Letter from U.S. Senators on Drug Patent Thickets

In June, U.S. Senators Leahy (Democrat) and Cornyn (Republican) (and others) sent a letter to the United States Patent and Trademark Office requesting that the USPTO review practices concerning granting “an excessive” amount of patents on pharmaceuticals, such as biologics, that may be driving up drug pricing costs. 

The press release concerning the letter states:

Senators Patrick Leahy (D-VT) and John Cornyn (R-TX) led a bipartisan letter Wednesday asking the U.S. Patent and Trademark Office to address an issue that is a significant cause of soaring drug prices.  Senators Richard Blumenthal (D-CT), Susan Collins (R-ME), Amy Klobuchar (D-MN), and Mike Braun (R-IN) also joined the letter.

The senators explained that drug companies and other large companies sometimes artificially extend the period in which they can charge high prices by filing many patents on nearly the same invention, creating a so-called patent thicket of dozens of patents on a single drug.  Those thickets make any challenge to the patents, or to the drug companies’ pricing of the covered drug, nearly impossible.  Because of the exorbitant cost of taking on each of the patents in these patent thickets, generic manufacturers are impeded from entering the market, hurting competition and raising prices for American consumers.  The secondary patents, which are similar to the originals, often receive less scrutiny from the Patent Office but have an outsized effect on everyday Americans who struggle to afford expensive medication.

Leahy believes the Patent Office has the ability to address this abusive practice, and he is asking the agency to take action to rein in this misuse of the patent system.  The letter requests that the Patent Office look into specific ideas for curbing the abuse and “take regulatory steps to improve patent quality and eliminate large collections of patents on a single invention.”  The Patent Act clearly states an inventor may obtain a single patent for a single invention, not dozens.  The senators believe the Patent Office can and should stop these large companies from undermining the patent system, obstructing appropriate competition, stifling innovation, and hurting Americans, who end up paying for all of this at the pharmacy.

The letter contains several ideas for the USPTO and the public to consider concerning future potential rule-making:

1. Terminal disclaimers, allowed under 37 C.F.R. 1.321(d), allow applicants to receive patents that are obvious variations of each other as long as the expiration dates match. How would eliminating terminal disclaimers, thus prohibiting patents that are obvious variations of each other, affect patent prosecution strategies and patent quality overall?

2. Currently, patents tied together with a terminal disclaimer after an obviousness-type double patent rejection must be separately challenged on validity grounds. However, if these patents are obvious variations of each other, should the filing of a terminal disclaimer be an admission of obviousness? And if so, would these patents, when their validity is challenged after issuance, stand and fall together?

3. Should the USPTO require a second look, by a team of patent quality specialists, before issuing a continuation patent on a first office action, with special emphasis on whether the claims satisfy the written description, enablement, and definiteness requirements of 35 U.S.C. § 112, and whether the claims do not cover the same invention as a related application?

4. Should there be heightened examination requirements for continuation patents, 2 to ensure that minor modifications do not receive second or subsequent patents?

5. The Patent Act requires the USPTO Director to set a “time during the pendency of the [original] application” in which continuation status may be filed. Currently there is no time limit relative to the original application. Can the USPTO implement a rule change that requires any continuation application to be filed within a set time frame of the ultimate parent application? What is the appropriate timeframe after the applicant files an application before the applicant should know what types of inventions the patent will actually cover? Would a benchmark (e.g., within six months of the first office action on the earliest application in a family) be preferable to a specific deadline (e.g., one year after the earliest application in a family)?

6. The USPTO has fee-setting authority and has set fees for filing, search, and examination of applications below the actual costs of carrying out these activities, while maintenance fees for issued patents are above the actual cost. If the up-front fees reflected the actual cost of obtaining a patent, would this increase patent quality by discouraging filing of patents unlikely to succeed? Similarly, if fees for continuation applications were increased above the initial filing fees, would examination be more thorough and would applicants be less likely to use continuations to cover, for example, inventions that are obvious variations of each other?

US Department of Justice Seeks Public Comments on Draft SEPs and FRAND Policy Statement

The US Department of Justice, Antitrust Division is seeking public comments regarding a new draft policy statement regarding SEPs and FRAND.  Details are below:

The Department of Justice announced today that it is requesting public comment on a new draft policy statement concerning standards-essential patents (SEPs) that seeks to promote good-faith licensing negotiations and addresses the scope of remedies available to patent owners that have agreed to license their essential technologies on reasonable and non-discriminatory or fair, reasonable, and non-discriminatory (F/RAND) terms. The Justice Department worked with U.S. Patent and Trademark Office (USPTO) and the National Institute of Standards and Technology (NIST) in responding to President Biden’s recent Executive Order on Promoting Competition in the American Economy, which encouraged the agencies to review the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments to ensure that it adequately promoted competition. Together the agencies, after consulting with the Federal Trade Commission, are now issuing a revised draft statement for public comment.

“The department looks forward to working with our agency partners,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We are committed to taking a principled, transparent, and balanced approach at the intersection of intellectual property and antitrust law.”

The draft statement is open to public comment for 30 days and provides a framework to facilitate good-faith licensing negotiation between SEP owners and potential licensees. It also discusses what remedies may be available when SEPs subject to voluntary F/RAND commitments are infringed. The draft statement indicates that good-faith negotiation that leads to widespread and efficient licensing between SEP holders and those who seek to implement standardized technologies can help to promote technology innovation, further consumer choice, and enable industry competitiveness. The draft statement will not be finalized until the agencies consider all stakeholder input.

In particular, the agencies are interested in comments addressing the following questions:

1. Should the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments be revised?
2. Does the draft revised statement appropriately balance the interests of patent holders and implementers in the voluntary consensus standards process, consistent with the prevailing legal framework for assessing infringement remedies?
3. Does the draft revised statement address the competition concerns about the potential for extension of market power beyond appropriate patent scope identified in the July 9, 2021 Executive Order on Promoting Competition in the American Economy?
4. In your experience, has the possibility of injunctive relief been a significant factor in negotiations over SEPs subject to a voluntary F/RAND commitment? If so, how often have you experienced this?
5. Are other challenges typically present in negotiating a SEP license? If so, what information should be provided or exchanged as a practical matter to make negotiation more efficient and transparent?
6. Are small business owners and small inventors impacted by perceived licensing inefficiencies involving SEPs? If so, how can licensing be made more efficient and transparent for small businesses and small inventors that either own, or seek to license, SEPs?
7. Will the licensing considerations set forth in the draft revised Statement promote a useful framework for good-faith F/RAND licensing negotiations? In what ways could the framework be improved? How can any framework for good-faith negotiations, and this framework in particular, better support the intellectual property rights policies of standards-setting organizations?
8. What other impacts, if any, would the draft revised statement have on standards-setting organizations and contributors to the standards development process?
9. The draft revised statement discusses fact patterns intended to indicate when a potential licensee is willing or unwilling to take a F/RAND license. Are there other examples of willingness or unwillingness that should be included in the statement?
10. Have prior executive branch policy statements on SEPs been used by courts, other authorities, or in licensing negotiations? If so, what effect has the use of those statements had on the licensing process, outcomes, or resolutions?
11. Are there resources or information that the U.S. government could provide/develop to help inform businesses about licensing SEPs subject to a voluntary F/RAND commitment?

Interested parties, including attorneys, economists, academics, consumer groups, industry stakeholders or other members of the public may submit public comments to Regulations.gov until Jan. 5, 2022. Information about the draft revised statement can also be found on the Antitrust Division’s website.

Biden Administration Executive Order on Competition: Some IP Portions

On July 9, 2021, the Biden Administration released an “Executive Order on Promoting Competition in the American Economy” that literally will touch almost every part of the U.S. economy.  The Executive Order can be found, here.  Concerning SEPs the Executive Order states:

To avoid the potential for anticompetitive extension of market power beyond the scope of granted patents, and to protect standard-setting processes from abuse, the Attorney General and the Secretary of Commerce are encouraged to consider whether to revise their position on the intersection of the intellectual property and antitrust laws, including by considering whether to revise the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued jointly by the Department of Justice, the United States Patent and Trademark Office, and the National Institute of Standards and Technology on December 19, 2019.

The Order further directs the FTC Chair to consider rulemaking in the following areas:

          (i)    unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy;
          (ii)   unfair anticompetitive restrictions on third-party repair or self-repair of items, such as the restrictions imposed by powerful manufacturers that prevent farmers from repairing their own equipment;
          (iii)  unfair anticompetitive conduct or agreements in the prescription drug industries, such as agreements to delay the market entry of generic drugs or biosimilars;
          (iv)   unfair competition in major Internet marketplaces;
. . . and
          (vii)  any other unfair industry-specific practices that substantially inhibit competition.

The Order directs the Secretary of Agriculture to prepare a report concerning IP laws and seeds and other inputs:

to help ensure that the intellectual property system, while incentivizing innovation, does not also unnecessarily reduce competition in seed and other input markets beyond that reasonably contemplated by the Patent Act (see 35 U.S.C. 100 et seq. and 7 U.S.C. 2321 et seq.), in consultation with the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, submit a report to the Chair of the White House Competition Council, enumerating and describing any relevant concerns of the Department of Agriculture and strategies for addressing those concerns across intellectual property, antitrust, and other relevant laws.

The Order directs the Secretary for Health and Human Services to address drug access and pricing:

          (iv)    not later than 45 days after the date of this order, submit a report to the Assistant to the President for Domestic Policy and Director of the Domestic Policy Council and to the Chair of the White House Competition Council, with a plan to continue the effort to combat excessive pricing of prescription drugs and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the Federal Government for such drugs, and to address the recurrent problem of price gouging;
          (v)     to lower the prices of and improve access to prescription drugs and biologics, continue to promote generic drug and biosimilar competition, as contemplated by the Drug Competition Action Plan of 2017 and Biosimilar Action Plan of 2018 of the Food and Drug Administration (FDA), including by:
               (A)  continuing to clarify and improve the approval framework for generic drugs and biosimilars to make generic drug and biosimilar approval more transparent, efficient, and predictable, including improving and clarifying the standards for interchangeability of biological products;
               (B)  as authorized by the Advancing Education on Biosimilars Act of 2021 (Public Law 117-8, 135 Stat. 254, 42 U.S.C. 263-1), supporting biosimilar product adoption by providing effective educational materials and communications to improve understanding of biosimilar and interchangeable products among healthcare providers, patients, and caregivers;
               (C)  to facilitate the development and approval of biosimilar and interchangeable products, continuing to update the FDA’s biologics regulations to clarify existing requirements and procedures related to the review and submission of Biologics License Applications by advancing the “Biologics Regulation Modernization” rulemaking (RIN 0910-AI14); and
               (D)  with the Chair of the FTC, identifying and addressing any efforts to impede generic drug and biosimilar competition, including but not limited to false, misleading, or otherwise deceptive statements about generic drug and biosimilar products and their safety or effectiveness;
          (vi)    to help ensure that the patent system, while incentivizing innovation, does not also unjustifiably delay generic drug and biosimilar competition beyond that reasonably contemplated by applicable law, not later than 45 days after the date of this order, through the Commissioner of Food and Drugs, write a letter to the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office enumerating and describing any relevant concerns of the FDA; 
          (vii)   to support the market entry of lower-cost generic drugs and biosimilars, continue the implementation of the law widely known as the CREATES Act of 2019 (Public Law 116-94, 133 Stat. 3130), by:
               (A)  promptly issuing Covered Product Authorizations (CPAs) to assist product developers with obtaining brand-drug samples; and
               (B)  issuing guidance to provide additional information for industry about CPAs; and
          (viii)  through the Administrator of the Centers for Medicare and Medicaid Services, prepare for Medicare and Medicaid coverage of interchangeable biological products, and for payment models to support increased utilization of generic drugs and biosimilars.

The Order directs the Secretary of Commerce to reconsider proposed regulations concerning technology transfer:

   (r)  The Secretary of Commerce shall:
          (i)    acting through the Director of the National Institute of Standards and Technology (NIST), consider initiating a rulemaking to require agencies to report to NIST, on an annual basis, their contractors’ utilization activities, as reported to the agencies under 35 U.S.C. 202(c)(5);
          (ii)   acting through the Director of NIST, consistent with the policies set forth in section 1 of this order, consider not finalizing any provisions on march-in rights and product pricing in the proposed rule “Rights to Federally Funded Inventions and Licensing of Government Owned Inventions,” 86 Fed. Reg. 35 (Jan. 4, 2021); 

                (iii)  not later than 1 year after the date of this order, in consultation with the Attorney General and the Chair of the Federal Trade Commission, conduct a study, including by conducting an open and transparent stakeholder consultation process, of the mobile application ecosystem, and submit a report to the Chair of the White House Competition Council, regarding findings and recommendations for improving competition, reducing barriers to entry, and maximizing user benefit with respect to the ecosystem.

The Proposed U.S. Endless Frontier Act -- An Excellent Idea!

This is an excellent idea—and with bipartisan support!  Over US $100 billion for innovation.  It would benefit from additional funding and this is the time to do it. Love the title! The press release follows. 

April 21, 2021

Washington, D.C.— Senate Majority Leader Chuck Schumer (D-NY), Senator Todd Young (R-IN), Representative Ro Khanna (D-CA), and Representative Mike Gallagher (R-WI) today reintroduced the bipartisan Endless Frontier Act. The bill is a bold initiative to advance and solidify the United States’ leadership in scientific and technological innovation through increased investments in the discovery, creation, and manufacturing of technology critical to U.S. national security and economic competitiveness. The bipartisan legislation further targets support to ensure new research investments translate into American industries and manufacturing and high-tech jobs in regions across the country to become global centers of emerging technology.

In addition to Senators Schumer and Young and Representatives Khanna and Gallagher, the Endless Frontier Act is cosponsored in the Senate by Senators Maggie Hassan (D-NH), Susan Collins (R-ME), Chris Coons (D-DE), Rob Portman (R-OH), Tammy Baldwin (D-WI), Lindsey Graham (R-SC), Gary Peters (D-MI), Roy Blunt (R-MO), Steve Daines (R-MT), Chris Van Hollen (D-MD), Mitt Romney (R-UT), and Mark Kelly (D-AZ). The bill is cosponsored in the House by Representatives Susan Wild (D-PA), Mike Turner (R-OH), Jamaal Bowman (D-NY), Brian Fitzpatrick (R-PA), and Mikie Sherrill (D-NJ).

“I am proud to reintroduce the bold, bipartisan and bicameral Endless Frontier Act today with Senator Todd Young and Representatives Ro Khanna and Mike Gallagher to address several dangerous weak spots in America’s economic and national security that threaten our global technological leadership,” said Majority Leader Schumer. “This legislation will enhance American competitiveness with China and other countries by investing in American innovation, building up regions across the country to lead in the innovation economy, creating good-paying American manufacturing and high-tech jobs, and strengthening America’s research, development, and manufacturing capabilities. The Endless Frontier Act is the key to preserving America’s position on the world stage as a current and future technological leader in the 21^st Century. In the coming weeks, the Senate will turn to this legislation and other pieces of bipartisan China related legislation to ensure that the U.S. Government’s hand at home and abroad is as strong as possible as we compete with China on all fronts.”

“We face a pivotal time in history. Right now, the Chinese Communist Party is emphasizing to the world that the United States is a divided nation. This is a rare opportunity to show the authoritarians in Beijing, and the rest of the world, that when it comes to our national security, and most importantly our China policy, we are united. The Endless Frontier Act is our path forward. I’ve worked with my colleagues to ensure the Endless Frontier Act will help invest in innovative small businesses that create jobs, invest in critical emerging technologies, and put America in a position to outgrow, out-innovate, and out-compete our leading geopolitical foe,” said Senator Young.

“The era of endless wars is coming to a close and, in its place, we are set to embark upon a 21st century full of mass investment in scientific discovery & technological innovation,” said Representative Khanna. “This bicameral, bipartisan legislation is the first step on making that future a reality for our country. Grateful for Majority Leader Schumer’s leadership, as well as the partnership of Sen. Young & Rep. Gallagher, as we bring together the innovations of Silicon Valley, the fortitude of the American Midwest, and the wealth of the Empire State under one proposal. President Biden is in an ideal position to sign the Endless Frontiers Act & make it a pillar of efforts to revive our post-COVID economy. We must win the technology race.”

“While America has long been the global leader in science and technology, our superiority is at risk. The Chinese Communist Party has used decades of intellectual property theft and industrial espionage to close this technological-gap in a way that threatens not only our economic security, but our also our way of life,” said Representative Gallagher. “Just as we did at the outset of the Cold War, we have to substantially increase federal investment in technologies essential for our national survival. This bill makes a down payment on our national leadership and will translate into new American companies, manufacturing and high-tech jobs, and opportunities for the regions across the country – most importantly the Midwest – to become a global center of emerging industry--all while ensuring that America, and not the Chinese Communist Party, dominates the critical technologies of the future.”

The Endless Frontier Act bill text can be found HERE and a summary can be found HERE.

Additional Background on the Bipartisan Endless Frontier Act

Today, the United States’ position as the unequivocal global leader in scientific and technological ingenuity and innovation is under pressure from China and is eroding. U.S. competitiveness and national security are being threatened by decades of U.S. underinvestment in research, manufacturing, and workforce development, coupled with foreign competitors stealing American intellectual property and aggressively investing to dominate the key technology fields of today and of the future.

The Endless Frontier Act will reinvigorate the U.S. innovation economy, support research and development throughout the country, help lead to the creation of new jobs of the future here in America, and keep the U.S. economically competitive against China and other countries. The members of Congress emphasize that without a significant and sustained increase in investment in research, education and training, technology transfer and entrepreneurship, manufacturing, and the broader U.S. innovation ecosystem across the nation, it is only a matter of time before America’s global competitors overtake the U.S. in terms of technological primacy, threatening national security and prosperity.

Specifically, the Endless Frontier Act proposes an expansion of the National Science Foundation (NSF) with the establishment of a new Technology and Innovation Directorate within NSF to advance research and development in 10 key technology focus areas, including artificial intelligence, semiconductors, quantum computing, advanced communications, biotechnology, and advanced energy.

The newly-established Technology and Innovation Directorate would receive $100 billion over five years to invest in basic and advanced research, commercialization, and education and training programs in technology areas critical to national leadership. An additional $10 billion would be authorized at the Department of Commerce to support regional technology strategies and to designate at least 10 regional technology hubs, awarding funds for comprehensive investment initiatives that position regions across the country as global centers for the research, development, entrepreneurship, and manufacturing of new key technologies.

The Endless Frontier Act also establishes a new Supply Chain Resiliency and Crisis Response Program with the national security mission of strengthening critical technology supply chains in the U.S. and with global allies and partners. Additionally, the bill invests in U.S. manufacturing innovation and competitiveness with over $2.4 billion in funding to enhance and expand the Manufacturing USA network to ensure global leadership in the manufacturing of key technologies. To support the country’s national security capabilities, the bill mandates a strategy on national competitiveness and ingenuity in science, research, and manufacturing to support the national security strategy.

US DOJ Antitrust Division Releases Review Letter Concerning University Patent Pool

The United States Department of Justice, Antitrust Division, (DOJ) has recently released a statement concerning the potential anticompetitive impact of a patent pool involving universities concerning patents involving “autonomous vehicles, the “Internet of Things,” and “Big Data.”  The DOJ finds that the pool is “unlikely to harm competition.”  The Press Release states:

The Justice  Department’s Antitrust Division announced today that it has completed its review of a proposed joint patent licensing pool known as the University Technology Licensing Program (UTLP).  UTLP is a proposal by participating universities to offer licenses to their physical science patents relating to specified emerging technologies.

As part of its review, the division interviewed potential participants and considered its prior guidance on patent pools.  The department has concluded that, on balance, and based on the representations in UTLP’s letter request, the proposed joint patent licensing program is unlikely to harm competition. 

“University research is a key driver of innovation,” said Acting Principal Deputy Assistant Attorney General Michael Murray for the Antitrust Division.  “In the physical science area, however, some university research may never be commercialized due to the costs associated with negotiating multiple licenses and combining the complementary university patents that may be necessary for cutting-edge implementations.  To the extent that UTLP makes it easier for universities to commercialize inventions that may be currently unlicensed and under-utilized, industry participants, university researchers, and ultimately the public can benefit.” 

Currently 15 participating universities intend to cooperate in licensing certain complementary patents through UTLP, which will be organized into curated portfolios relating to specific technology applications for autonomous vehicles, the “Internet of Things,” and “Big Data.”  The overarching goal of UTLP is to centralize the administrative costs associated with commercializing university research and help participating universities to overcome the budget, institutional relationship, and other constraints that make licensing in these areas particularly challenging for them. 

UTLP has incorporated a number of safeguards into its program to help protect competition, including admitting only non-substitutable patents, with a “safety valve” if a patent to accomplish a particular task is inadvertently included in a portfolio with another, substitutable patent.  The program also will allow potential sublicensees to choose an individual patent, a group of patents, or UTLP’s entire portfolio, thereby mitigating the risk that a licensee will be required to license more technology than it needs.  The department’s letter notes that UTLP is a mechanism that is intended to address licensing inefficiencies and institutional challenges unique to universities in the physical science context, and makes no assessment about whether this mechanism if set up in another context would have similar procompetitive benefits.

Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Antitrust Division currently intends to challenge the action under the antitrust laws based on the information provided.  The department’s conclusions in this business review apply only to UTLP.  They are not applicable to any other agreements or initiatives relating to patent licensing by universities or other entities.  The department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.

Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. 

The DOJ Business Review Letter is available, here.  The universities' request letter for review is available, here.  

Big Win for Qualcomm in the Ninth Circuit

 In a big win for Qualcomm, the Ninth Circuit Court of Appeals (Judge Callahan writing the opinion), in FTC v. Qualcomm, __ F.3d __ (9^th Cir. August 11, 2020), found that Qualcomm had not violated competition law based on licensing practices, including refusal to deal and FRAND practices.  Notably, the Ninth Circuit overturned the District Court’s “permanent, worldwide injunction prohibiting Qualcomm’s core business practices.”  The District Court made five major findings:

1) Qualcomm's “no license, no chips” policy amounts to “anticompetitive conduct against OEMs” and an “anticompetitive practice[ ] in patent license negotiations”; (2) Qualcomm's refusal to license rival chipmakers violates both its FRAND commitments and an antitrust duty to deal under § 2 of the Sherman Act; (3) Qualcomm's “exclusive deals” with Apple “foreclosed a ‘substantial share’ of the modem chip market” in violation of both Sherman Act provisions; (4) Qualcomm's royalty rates are “unreasonably high” because they are improperly based on its market share and handset price instead of the value of its patents; and (5) Qualcomm's royalties, in conjunction with its “no license, no chips” policy, “impose an artificial and anticompetitive surcharge” on its rivals’ sales, “increas[ing] the effective price of rivals’ modem chips” and resulting in anticompetitive exclusivity.

One important problem with the District Court’s analysis, according to the Ninth Circuit, was the District Court’s failure “to distinguish between Qualcomm’s licensing practices (which primarily impacted OEMs) and its practices relating to modem chip sales (the relevant antitrust market).”  The Ninth Circuit rejected the District Court’s reliance on the Aspen exception to the general concept that refusals to deal are not antitrust violations and quoted a prior case: “’Competitors are not required to engage in a lovefest.’”  The Ninth Circuit also found that Qualcomm’s conduct in breaching its SSO agreements did not arise to an antitrust violation.  Notably, the Ninth Circuit stated:

Finally, we note the persuasive policy arguments of several academics and practitioners with significant experience in SSOs, FRAND, and antitrust enforcement, who have expressed caution about using the antitrust laws to remedy what are essentially contractual disputes between private parties engaged in the pursuit of technological innovation. The Honorable Paul R. Michel, retired Chief Judge of the Court of Appeals for the Federal Circuit, argues that it would be a mistake to use “the hammer of antitrust law ... to resolve FRAND disputes when more precise scalpels of contract and patent law are effective.” Amicus Curiae Br. of The Honorable Paul R. Michel (Ret.) at 23. Judge Michel notes that “[w]hile antitrust policy has its place as a policy lever to enhance market competition, the rules of contract and patent law are better equipped to handle commercial disputes between the world's most sophisticated companies about FRAND agreements.” Id. at 24. Echoing this sentiment, a former FTC Commissioner, Joshua Wright, argues that “the antitrust laws are not well suited to govern contract disputes between private parties in light of remedies available under contract or patent law,” and that “imposing antitrust remedies in pure contract disputes can have harmful effects in terms of dampening incentives to participate in standard-setting bodies and to commercialize innovation.” Wright, supra note 1, at 808–09.

The Ninth Circuit rejected the District Court’s determination that Qualcomm engaged in anticompetitive conduct by charging “unreasonably high royalty rates” among other things.  The Ninth Circuit stated:

We hold that the district court's “anticompetitive surcharge” theory fails to state a cogent theory of anticompetitive harm. Instead, it is premised on a misunderstanding of Federal Circuit law pertaining to the calculation of patent damages, it incorrectly conflates antitrust liability and patent law liability, and it improperly considers “anticompetitive harms to OEMs” that fall outside the relevant antitrust markets. Furthermore, even if we were to accept the district court's conclusion that Qualcomm's royalty rates are unreasonable, we conclude that the district court's surcharging theory still fails as a matter of law and logic.

On the Federal Circuit’s damages law, the Ninth Circuit states:

Even if we accept that the modem chip in a cellphone is the cellphone's SSPPU, the district court's analysis is still fundamentally flawed. No court has held that the SSPPU concept is a per se rule for “reasonable royalty” calculations; instead, the concept is used as a tool in jury cases to minimize potential jury confusion when the jury is weighing complex expert testimony about patent damages. See Ericsson, 773 F.3d at 1226(explaining that the SSPPU concept is a flexible evidentiary tool, not an unyielding substantive element of patent damages law); VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1327–28 (Fed. Cir. 2014) (same); LaserDynamics, 694 F.3d at 68 (same). As this case involved a bench trial, the potential for jury confusion was absent.

Moreover, the Federal Circuit rejected the premise of the district court's determination: that the SSPPU concept is required when calculating patent damages. See Commonwealth Sci. & Indus. Research Org. v. Cisco Sys., Inc., 809 F.3d 1295, 1303 (Fed. Cir. 2015) (“The rule Cisco advances—which would require all damages models to begin with the [SSPPU]—is untenable [and] conflicts with our prior approvals of a methodology that values the asserted patent based on comparable licenses.”) (citations omitted). The Federal Circuit has also observed that “ ‘[s]ophisticated parties routinely enter into license agreements that base the value of the patented inventions as a percentage of the commercial products’ sales price,’ and thus ‘[t]here is nothing inherently wrong with using the market value of the entire product.’ ” Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1349 (Fed. Cir. 2018) (some alterations in original) (quoting Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1339 (Fed. Cir. 2009)). These statements of law and current practice run counter to the district court's conclusion that patent royalties cannot be based on total handset price and that doing so exposes a firm to potential antitrust liability.

On Qualcomm’s “no license, no chips” policy, the Ninth Circuit stated:

This is not to say that Qualcomm's “no license, no chips” policy is not “unique in the industry” (it is), or that the policy is not designed to maximize Qualcomm's profits (Qualcomm has admitted as much). But profit-seeking behavior alone is insufficient to establish antitrust liability. As the Supreme Court stated in Trinko, the opportunity to charge monopoly prices “is an important element of the free-market system” and “is what attracts ‘business acumen’ in the first place; it induces risk taking that produces innovation and economic growth.” Trinko, 540 U.S. at 407, 124 S.Ct. 872. The record suggests that this case is more like Am. Express, where a company's novel business practice at first appeared to be anticompetitive, but in fact was disruptive in a manner that was beneficial to consumers in the long run because it forced rival credit card companies to adapt and innovate. 138 S. Ct. at 2290. Similarly here, companies like Nokia and Ericsson are now “[f]ollowing Qualcomm's lead” with respect to OEM-level licensing, and beginning in 2015 rival chipmakers began to successfully compete against Qualcomm in the modem chip markets. We decline to ascribe antitrust liability in these dynamic and rapidly changing technology markets without clearer proof of anticompetitive effect.

On the alleged anticompetitive nature of Qualcomm’s dealings with Apple, the Ninth Circuit stated:

Even if we were to agree with the district court that the Apple agreements were exclusive dealing contracts that substantially foreclosed competition in the relevant antitrust markets, it is undisputed that these agreements do not pose any current or future threat of anticompetitive harm. Despite the “clawback provisions,” Apple itself terminated the agreements in 2015—two years before the FTC filed its action. Thus, while we agree with the district court that these were structured more like exclusive dealing contracts than volume discount contracts, they do not warrant the issuance of an injunction.

Finally, the Ninth Circuit nicely sums up its reasoning and approach:

Anticompetitive behavior is illegal under federal antitrust law. Hypercompetitive behavior is not. Qualcomm has exercised market dominance in the 3G and 4G cellular modem chip markets for many years, and its business practices have played a powerful and disruptive role in those markets, as well as in the broader cellular services and technology markets. The company has asserted its economic muscle “with vigor, imagination, devotion, and ingenuity.” Topco Assocs., 405 U.S. at 610, 92 S.Ct. 1126. It has also “acted with sharp elbows—as businesses often do.” Tension Envelope Corp. v. JBM Envelope Co., 876 F.3d 1112, 1122 (8th Cir. 2017). Our job is not to condone or punish Qualcomm for its success, but rather to assess whether the FTC has met its burden under the rule of reason to show that Qualcomm's practices have crossed the line to “conduct which unfairly tends to destroy competition itself.” Spectrum Sports, 506 U.S. at 458, 113 S.Ct. 884. We conclude that the FTC has not met its burden.

First, Qualcomm's practice of licensing its SEPs exclusively at the OEM level does not amount to anticompetitive conduct in violation of § 2, as Qualcomm is under no antitrust duty to license rival chip suppliers. To the extent Qualcomm has breached any of its FRAND commitments, a conclusion we need not and do not reach, the remedy for such a breach lies in contract and patent law. Second, Qualcomm's patent-licensing royalties and “no license, no chips” policy do not impose an anticompetitive surcharge on rivals’ modem chip sales. Instead, these aspects of Qualcomm's business model are “chip-supplier neutral” and do not undermine competition in the relevant antitrust markets. Third, Qualcomm's 2011 and 2013 agreements with Apple have not had the actual or practical effect of substantially foreclosing competition in the CDMA modem chip market. Furthermore, because these agreements were terminated years ago by Apple itself, there is nothing to be enjoined.

Where will the Great Brand Odwalla Land?

In a past post, I wrote about how great brands and products never die.  I provided two examples: the first, was Sesame Street; and the second, was Hostess products.  There’s another example of a great brand and product that is on the chopping block: Odwalla smoothies and juices.  Coca-Cola has announced that it is terminating the Odwalla brand.  According to CNN, this is a reaction, in part, to changing consumer demand and simplifying their supply chain.  Those smoothies do have a lot of sugar!  

Notably, Coca-Cola has over 500 brands.  Unlike Hostess, which was in bankruptcy, it will be interesting to see whether Coca-Cola will sell the brand.  If Coca-Cola truly wants to exit the smoothie business, then perhaps they won’t be concerned about a future competitor in that business line.  Coca-Cola does have other juice products.  However, even if demand for smoothies is falling off, I do wonder whether the demand will pick up again.  Interestingly, last year, Coca-Cola offered a zero calorie smoothie—perhaps they didn’t invest enough in marketing the new product.  For sure, it does take a while for trademark abandonment to kick in.  We’ll have to wait and see what happens.  Oh, and by the way, Odwalla was purchased for US $181 million almost two decades ago.  (And, if you are curious about my children's politics--now 15, 12 and 11--they think "cancel culture" is very troubling (everybody makes mistakes, redemption and what happened to free speech). They would vote for Biden if they could, but are relatively lost about what he stands for except that he's the alternative to President Trump--I think some debates will help.  They are concerned about Biden's comments about how if African Americans don't vote for him then they're not black and are somewhat mollified by his back-tracking.)

The Pandemic Anti-Monopoly Act to be Introduced in US Congress

U.S. Representative Ocasio-Cortez and Senator Warren will introduce the “Pandemic Anti-Monopoly Act” (Act.)  The Act would apparently halt some mergers and acquisitions during a time when many small and medium sized companies may be struggling financially.  Many commentators have already asserted that too many anti-competitive mergers and acquisitions have been approved by regulators.  The fear is that some large companies may try to take advantage of the crisis.  

Some mergers and acquisitions may result in increased innovation.  Interestingly, one provision appears to target companies with a patent relating to the COVID-19 issue.  A merger or acquisition could be necessary for commercialization.  The Press Release for the Act states, in part:

The Pandemic Anti-Monopoly Act would: 

• Impose a moratorium on risky mergers and acquisitions until the Federal Trade Commission (FTC) unanimously determines that small businesses, workers, and consumers are no longer under severe financial distress. The moratorium includes all mergers and acquisitions that involve:

o    Companies with over $100 million in revenue or financial institutions with over $100 million in market capitalization;

o    Private equity companies, hedge funds, or companies that are majority-owned by a private equity company or hedge fund;

o    Companies with an exclusive patent that impacts the crisis, like personal protective equipment; and

o    Transactions that must otherwise be reported to the FTC under current law.

• Pause all waiting periods and deadlines imposed on antitrust agencies during the moratorium.

• Direct the FTC to engage in rulemaking to establish a legal presumption against mergers and acquisitions that pose a risk to the government's ability to respond to a national emergency. 

Brookings Institute Article on Regulating the Internet (with a nod to antitrust enforcement)

Tom Wheeler at the Brookings Institute has published an interesting article titled, “COVID-19 has Taught Us that the Internet is Critical and Needs Public Interest Oversight.”  Even before COVID-19, the regulation of internet platforms has been a very hot issue in the United States and in other countries.  For example, India recently announced a new regulator for Internet commerce.  In Mr. Wheeler’s article, he discusses why Internet regulation is different from Industrial Age type regulation and proposes four helpful suggestions for moving forward: 

First, do not pretend these challenges can be shoehorned into industrial era regulatory structures. . . .

Second, digital companies should have a seat at the table in the development of the rules rather than having them force-fed. . . . There should be a new federal agency that convenes, oversees, and approves a public-private process that establishes an agency-enforceable Digital Code.

Third, this new Digital Code is not a substitute for antitrust enforcement. The Digital Code is about the behavior of the companies in the services they offer to the public. If a company behaves in an anticompetitive manner, including mergers, that should be the jurisdiction of antitrust enforcers and the Code should not include antitrust exemption.

Fourth, the regulatory oversight needs to be principles-based and agile. Industrial production was a rules-based linear process where each person on the shop floor followed rules for a specific task. Industrial regulation followed the same rigid pattern. In contrast, modern digital products are never finished (think how your smartphone is always updating its software). Digital products are constantly adapting to the changes in their environment. This agile development needs to find its equivalent in agile regulation. Heavy-handed industrial “do this or else” needs to give way to “this is how technology is changing and business practices must evolve as well.”

The full article is available, here.  COVID-19 may speed things up a bit. 

Proposed Act on Curbing Anticompetitive Conduct in the United States

On March 10, 2020, former Presidential Candidate and Senator Amy Klobuchar introduced legislation designed to address abuses of market power by basically making it easier to prove violations of the antitrust laws.  The Press Release states, in part: 

The Anticompetitive Exclusionary Conduct Prevention Act would deter anticompetitive abuses that harm consumers and innovation

WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation today to deter anticompetitive abuses that distort the competitive process and harm consumers, innovation, and new business formation. The Anticompetitive Exclusionary Conduct Prevention Act prohibits anticompetitive exclusionary conduct that risks harm to the competitive process. It also makes reforms to improve antitrust enforcement across the board. The bill was cosponsored by Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ).

“We have a major monopoly problem in this country, which harms consumers and threatens free and fair competition across our economy. Companies need to be put on notice that exclusionary behavior that threatens competition cannot continue,” Klobuchar said. “Our legislation will deter anticompetitive abuses, helping to protect the competitive markets that are critical to ensuring fair prices for products and services, spurring innovation, and preserving opportunity for American entrepreneurs.”

Today’s economy – including key sectors like online commerce, pharmaceuticals, and agriculture – is characterized by growing market concentration and market power. Harmful exclusionary practices by powerful companies threaten free and fair competition, as decades of federal court decisions have chilled enforcement under existing laws. As a result, U.S. enforcement against the anticompetitive conduct of powerful firms has lagged behind efforts in other countries, creating an increased danger of our markets becoming less competitive and of our economy becoming less prosperous.     

Overview Anticompetitive Exclusionary Conduct Prevention Act of 2019:

KEY PROVISIONS

1. Prohibit Anticompetitive Exclusionary Conduct: Amends the Clayton Antitrust Act to prohibit “exclusionary conduct” that presents an “appreciable risk of harming competition.”

1.       Shifts the Burden of Proof so that powerful companies that have a market share of greater than 50% or that otherwise have substantial market power would have to prove that their exclusionary conduct in the markets they dominate does not present an “appreciable risk of harming competition.”

2.       Allows DOJ and FTC to seek substantial civil penalties for violations of up to 15% of total U.S. revenues or 30% of the affected U.S. revenues in addition to other remedies available under the Clayton Act.

2. Eliminate Unnecessary “Market Definition” Requirements: Courts often require claimants to prove a relevant market to establish liability under the antitrust laws, even in the face of clear evidence of competitive harm. The bill clarifies that the antitrust laws do not require definition of a relevant market, unless the statutory language explicitly requires it to resolve the case. 
3. Prevent Courts from Improperly Implying Antitrust Immunities: Courts have implied immunity from the antitrust laws for certain conduct based on the existence of federal regulation, in certain circumstances ignoring statutory savings clauses passed by Congress. This bill limits the ability of courts to imply antitrust immunity for regulated conduct. 

The legislation has the support of leading national consumer welfare and antitrust policy organizations American Antitrust Institute, Consumer Reports, and Public Knowledge.

“AAI supports Senator Klobuchar’s bill to strengthen U.S. law to limit harmful conduct by dominant firms -an area of antitrust that has been largely unenforced for decades,” said Diana L. Moss, President, American Antitrust Institute. “The bill will set forth clear, strong, and needed criteria for policing conduct that is designed to drive rivals from markets. It should garner broad bi-partisan support from members of Congress who seek to protect our markets, competition, consumers, and workers.”

"Senator Klobuchar's bill addresses a key shortcoming in our law. Current antitrust law doesn't apply to a company until it already has a monopoly, or is on the verge of one -even when it has enough market power to sabotage the competitive process,” said George Slover, Senior Policy Counsel, Consumer Reports. “This targeted, measured bill would move the line where it needs to be to address the kinds of anticompetitive abuse we are seeing too much of in today's marketplace. This is particularly important as commerce and communications increasingly take place online, with dominant platforms presenting new challenges to making sure we have a competitive marketplace that works for consumers and for all who seek to reach them." 

“For far too long, antitrust enforcers have been fighting with one hand tied behind their backs. This legislation will revitalize antitrust enforcement in exclusionary conduct cases by sharpening the tools of our antitrust agencies,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge. “We commend this effort to address the problem of exclusionary conduct to ensure these competitive harms do not escape scrutiny.”

The full press release is available, here.  The full proposed legislation is available, here.