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
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
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, for example, Republican Senator Mike Lee and 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, & 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 the end
of 2018, more than 7000 breweries and beer pubs were operating in the US, and 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
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
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
Cut the budget & staff of DOJ Antitrust Division
Instead of cutting the Antitrust Division's staff, as the Trump Administration did, (with the exception of the very end of their volatile four year tenure, when both the FTC and the DOJ Antitrust Division budgets were increased), we should be
strengthening antitrust enforcement. Only by doing the latter can we ensure free, open, and highly competitive markets. In this era of BIG, now more than ever we need vigorous enforcement efforts to counterbalance runway corporate
consolidation and outside power of billionaires and millionaires and monopolies and monopsonies.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
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
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
Page last updated: Nov 25, 2021