Amy Klobuchar in Antitrust, by Amy Klobuchar
On Corporations:
Companies owned by same shareholders akin to trusts
Companies seek to maximize their profits, but if two "competitor" companies are actually owned by shareholders, those companies begin to resemble old style "trusts" and are incentivized to compete less aggressively so that they can each reap higher
profits, thus benefiting their common owners. As a result, prices rise and competitors suffer. For example, higher levels of horizontal shareholding have been shown to increase pharmaceutical prices and-of special interest to farmers-the cost of seeds.
Source: Antitrust, by Amy Klobuchar, p. 260-261
Apr 27, 2021
On Corporations:
Consolidations like "Beerhemoth" can hurt craft brewers
I've worked to draw attention to the growing problems of runaway corporation consolidation and monopoly power: the often esoteric topic of antitrust. In 2015, I held a hearing titled, "Merger and the state of competition in the beer industry." This
merger [of several large beer companies] "could have negative consequences for consumers, and could deprive thriving craft and independent brewers of distribution channels critical for reaching retail consumers." I pointed out that the growing
"Beerhemoth" consolidation in the industry is concerning and that efforts must always be to protect the emergence of craft protectors that have brought so much needed competition back into the beer market. As of 2018, more than 7000 breweries and beer
pubs were operating in the US (with more than 170 in my home state of Minnesota); those independent craft breweries must be allowed to compete effectively against the industries' biggest players. And the best part? The independence means American jobs.
Source: Antitrust, by Amy Klobuchar, p.178
Apr 27, 2021
On Jobs:
Strengthening unions key to rebalancing American capitalism
Union workers earn on average 20% more than non-union members in similar jobs, making unions a crucial counterweight to the enormous power of corporations in US labor markets. However, union workers have been under relentless attack over multiple
decades, with the enactment of so called "right to work" laws whereby workers receive the benefits of union contracts without having to pay the union dues that support union activities. Congress and the states must act to protect collective bargaining
rights, to safeguard unions and to increase the minimum wage so that workers can earn a living.Strengthening unions is a key component of rebalancing American capitalism. Without strong unions and fully functioning National Labor Relations
Boards that enforce the country's laws protecting unions, collective bargaining, and economic security, such as pension and retirement benefits, will lead to stronger competition, and a more solid economy, and higher wages.
Source: Antitrust, by Amy Klobuchar, p.192
Apr 27, 2021
On Technology:
Net neutrality must be restored and zealously protected
Net neutrality--the simple idea that internet service providers must treat all internet traffic and communications equally and refrain from discriminating based on the website, platform, user, or content--must be restored and zealously protected.
After the Federal Communications commission scrapped the net neutrality rules, I emphasized that the commission's vote will harm the consumers, particularly the rural areas. As I said at the time of that FCC vote, "It will limit competition.
And it will hurt small business entrepreneurship and innovation. I will continue to push for free and open internet." This is an issue that I care a lot about, as do millions of other Americans.
The internet must be equally accessible to all households and families-without discrimination, without regard to whether a person lives in a big city, or on a farm, and without favoring big companies over small businesses and individual citizens.
Source: Antitrust, by Amy Klobuchar, p.197-198
Apr 27, 2021
On Civil Rights:
Antitrust laws used effectively to stop discrimination
Traditionally, the antitrust laws helped fight discrimination. People may not commonly associate antitrust laws with anti-discrimination efforts, but they should. Antitrust laws were used effectively in the 1960s to stop discrimination in housing and
employment. For example, the Sherman Act was used in the medical profession by stopping the abhorrent practice by Chicago area hospitals and medical organizations of barring black physicians from joining their staff and their ranks.
In 1964, one commentator observes, "Reginald Johnson, secretary of the National Urban League, encouraged the use of antitrust laws to break up housing discrimination in the nation's cities. Antitrust actions taken by the American Civil Liberties Union,
the NAACP Legal Defense and Educational Fund, and other organizations helped force desegregation of neighborhoods and realty boards in cities including Trenton, St. Louis, Pittsburg, Akron, and New York City."
Source: Antitrust, by Amy Klobuchar, p.230-231
Apr 27, 2021
On Corporations:
How courts define market may limit application of antitrust
How antitrust enforcement agencies and the courts define what the relevant market is, can determine the outcome of the analysis as to whether there is an antitrust violation. For example, in 2008, the Justice Department approved a merger between
satellite radio's two principal carriers, XM Satellite Radio Holdings and Sirius Satellite Radio. "Although critics argue that the relevant market was satellite radio," [with 17 million consumers] one book notes, "the Justice Department concluded that
satellite radio was a small piece of a larger market that included radio and other music delivery services, such as Apple iPods and online entertainment." If the relevant market is defined too broadly, mergers and acquisitions can too easily escape
the scrutiny of regulators, and not only are consumers left with fewer and fewer choices, but dominant companies are permitted to escape liability for their anticompetitive conduct.
Source: Antitrust, by Amy Klobuchar, p.249
Apr 27, 2021
On Jobs:
Non-compete employment agreements used to suppress wages
Non-compete agreements are used to suppress the wages of both high-skilled, high-wage jobs, with the terms of non-compete agreements almost always dictated exclusively by the employer. Employers have even attempted to use non-compete agreements
to suppress the wages of minimum wage workers who are already struggling to make ends meet. In one particular egregious example, Jimmy John's--an Illinois-based sandwich chain--was found to be using non-compete agreements to bar departing employees from
taking jobs with competing sandwich shops for two years after leaving the company. That was an outrageous effort to suppress wages by trying to deter employees from leaving for better paying employment opportunities. In June 2016, after an investigation
by the New York Attorney General's Office, the company finally agreed to stop using that anti-competitive practice--one that targeted low-wage workers, putting them in fear of being sued if they left to work for a competitor.
Source: Antitrust, by Amy Klobuchar, p.263
Apr 27, 2021
On Corporations:
More effective to rebrand antitrust as "competition policy"
It's not ever going to be easy to get the public to perk up when they hear the word "antitrust". That word came from America's historic1880's social movement that rose up against trusts--the behemoth trusts made famous by ultra-wealthy men with their
famous middle initials. It's a word that's admittedly, somewhat outdated, even though the idea it represents--that competition must be zealously safeguarded--is as important and relevant as ever. "Antitrust", a professor explains, is actually "a
horrible word--so negative, so poorly descriptive of the actual field, so antiquated." Although American lawyers and judges still speak of antitrust law and antitrust violations because of the way American law developed over many decades, the antitrust
terminology is not as prevalent elsewhere: "In most other countries that have an analogue to the United States' Sherman Act," the professor observers, "antitrust law is called competition law, a more positive and evocative way of describing the field."
Source: Antitrust, by Amy Klobuchar, p.274-275
Apr 27, 2021
On Government Reform:
Top-to-bottom review of nation's antitrust law is in order
Our nation's antitrust laws should promote robust competition. Improvements to those laws should return to curbing monopolistic and oligopolistic behavior that leads to market concentration and consolidation. A top-to-bottom review of the nation's
antitrust laws is in order--the laws have not been updated to keep up with the times.There are numerous ways in which companies with monopoly market power can engage in anticompetitive and exclusionary conduct, and in digital age we must pass new
laws--such as my Anti-Competitive Exclusionary Conduct Prevention Act--to conduct and prevent such acts. As [one analyst] says of that bill's importance, "The proposed legislation would update the previous time Congress passed legislation on the topic
of dominant firm conduct, in 1914, when airplanes were new, Archduke Ferdinand's assassination, (that sparked World War 1) was three weeks away, and Ford Motor Company had just instituted an 8 hour workday."
Source: Antitrust, by Amy Klobuchar, p.284
Apr 27, 2021
On Government Reform:
Increase the budget & staff of Antitrust Division
We must be smart about antitrust enforcement and reform, but we need to be bold. Instead of cutting the Antitrust Division's staff, as the Trump Administration did, we should be strengthening antitrust enforcement. Adding more staff and resources for
FTC and Department of Justice enforcement is particularly helpful for reviewing highly complex major tech mergers and continuing and expanding upon tech investigations and legal actions.To give federal officials the resources they need to both
examine and take action against anticompetitive exclusionary conduct as well as evaluate the potential effects of a merger or acquisition, Congress must act or make appropriations, not just give lip service to the issue. Agency budgets matter, and the
president and Congress should be willing to better fund agencies that work on antitrust issues given the importance of stopping anticompetitive product, protecting consumers, and safeguarding the health of America's economy.
Source: Antitrust, by Amy Klobuchar, p.287
Apr 27, 2021
On Corporations:
Shift burden of proof to companies on megamerger's impact
In September 2017, I introduced legislation--and did so again in 2021--to protect competition and prevent consolidation of industries that would be harmful to the consumers. It proposes to amend the Clayton Act to:- restore the original purpose of
the antitrust laws to prevent anticompetitive mergers;
- shift the burden of proof for megamergers and dominant firm mergers to the consolidating parties to prove that the merger does not harm competition;
- create the office of the
competition advocate to encourage antitrust investigations and to analyze and publish reports on merger activity; and
- add the term "monopsony" to the Clayton Act so that it is clear that single buyers controlling a market can be found to violate
the law.
A monopsony, often referred to as a buyer's monopoly, is a market condition in which there is only one buyer or in which a large buyer controls a large portion of the market and drives down prices.
Source: Antitrust, by Amy Klobuchar, p.293
Apr 27, 2021
On Corporations:
Ban antitrust violators from working in the same industry
When violations are detected & penalties for antitrust violations are imposed, the violators should be held accountable for their actions and be banned from working in the same industry. Right now, cartel activity is not being adequately punished, and
violators are all too frequently just receive the equivalent of a police verbal warning at a traffic stop before going right back to doing what they were doing before. Clearly, much more needs to be done to detect and permanently shutter cartels.
Source: Antitrust, by Amy Klobuchar, p.307
Apr 27, 2021
On Crime:
Increase fines on cartels engaging in price fixing
Consider this: cartel fines have long been calculated on the basis of a US Sentencing Commission formula. That formula is predicated on an estimate "that the average gain from price fixing is 10% of the selling price." However, empirical data shows that
the median cartel overcharge over the last twenty years has been more than double that figure, 22%, with the mean, or average overcharge calculated to be 49%. Some cartels have raised prices substantially for products or services, leading to a higher
figure. In short, today's fines are not properly calibrated to remediating the harm. At a minimum, the US Sentencing Commission should double its current presumption that cartels raise prices by an average of 10%. This would increase criminal fines
substantially while serving as a deterrent to future cartel activity. White collar offenders may not be committing murders, but all too often they are getting away with murder when it comes to jacking up prices on unsuspecting Americans.
Source: Antitrust, by Amy Klobuchar, p.307
Apr 27, 2021
On Education:
Incentivize and fund STEM education & apprenticeships
To promote healthy markets and vigorous competition, we need to ensure a healthy pipeline of talent to further entrepreneurship, innovation, and startups. To that end, I have long been a supporter of education and apprenticeship training in the
disciples of science, technology, engineering, and math--collectively known as STEM.The Sherman Act, the Clayton Act, and other antitrust laws cannot guarantee a vibrant economy. We also need to invest in people. The antitrust laws
(which seek to penalize unlawful, anticompetitive conduct) must thus be paired with education efforts to spur more competition with relevant markets and industries.
How do we support STEM? First, the most obvious: better student loan rates
and payback programs, and free one and two year degrees. Second, targeted recruitment efforts in minority areas, as well as company and non-profit high school mentorships, career fairs, and internships.
Source: Antitrust, by Amy Klobuchar, p344-345
Apr 27, 2021
Page last updated: Nov 25, 2021