Trust-Busting for the Twenty-First Century Act

II 117TH CONGRESS 1ST SESSION S. 1074 To amend the Sherman Act, the Clayton Act, and the Federal Trade Commis- sion Act to promote competition in the United States, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 12, 2021 Mr. HAWLEY introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To amend the Sherman Act, the Clayton Act, and the Fed- eral Trade Commission Act to promote competition in the United States, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Trust-Busting for the 4 Twenty-First Century Act’’. 5 SEC. 2. SHERMAN ACT AMENDMENTS. 6 The Sherman Act (15 U.S.C. 1 et seq.) is amended— 7 (1) in section 2 (15 U.S.C. 2)— 8 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1074 IS (A) by striking ‘‘Every’’ and inserting ‘‘(a) 1 Every’’; and 2 (B) by adding at the end the following: 3 ‘‘(b)(1) In any case alleging a violation of this section 4 or section 1 in which a plaintiff establishes by a prepon- 5 derance of the evidence (including direct evidence) the ex- 6 istence of substantial market power or the anticompetitive 7 or otherwise detrimental effects of particular practices, a 8 plaintiff need neither define the scope of a relevant market 9 nor establish the share of such a market controlled by the 10 defendant. 11 ‘‘(2) In any case alleging a violation of this section 12 or section 1 in which the defendant relies on alleged pro- 13 competitive effects to justify the conduct of the defendant, 14 the defendant shall establish by clear and convincing evi- 15 dence that— 16 ‘‘(A) the procompetitive effects of the conduct 17 clearly outweigh the anticompetitive effects of the 18 conduct; and 19 ‘‘(B) the defendant could not obtain substan- 20 tially similar procompetitive effects through commer- 21 cially reasonable alternatives that would involve ma- 22 terially lower competitive risks.’’; and 23 (2) in section 4 (15 U.S.C. 4)— 24 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1074 IS (A) by striking ‘‘The several’’ and insert- 1 ing ‘‘(a) The several’’; and 2 (B) by adding at the end the following: 3 ‘‘(b) In any action brought by the United States or 4 the Federal Trade Commission alleging a violation of this 5 Act, if the United States or the Federal Trade Commis- 6 sion establishes such a violation, the court shall order 7 disgorgement of all profits earned by the defendant as a 8 result of the conduct constituting that violation, except 9 upon a showing of extraordinary good cause. 10 ‘‘(c) It is the policy of the United States that the 11 principal standard for evaluating the permissibility of 12 practices under this Act is the protection of economic com- 13 petition within the United States.’’. 14 SEC. 3. CLAYTON ACT AMENDMENTS. 15 The Clayton Act (15 U.S.C. 12 et seq.) is amended— 16 (1) in the first section (15 U.S.C. 12), by add- 17 ing at the end the following: 18 ‘‘(c) It is the policy of the United States that the 19 principal standard for evaluating the permissibility of 20 practices under this Act is the protection of economic com- 21 petition within the United States.’’; 22 (2) in section 7 (15 U.S.C. 18), by adding at 23 the end the following: 24 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1074 IS ‘‘No person with a market capitalization exceeding 1 $100,000,000,000 (as adjusted and published for each fis- 2 cal year beginning after September 30, 2022, in the same 3 manner as provided in section 8(a)(5) to reflect the per- 4 centage change in the gross national product for such fis- 5 cal year compared to the gross national product for the 6 year ending September 30, 2021) shall acquire, directly 7 or indirectly, the whole or any part of the stock or other 8 share capital or the whole or any part of the assets of 9 1 or more persons engaged in commerce or in any activity 10 affecting commerce, where in any line of commerce or in 11 any activity affecting commerce in any section of the coun- 12 try, the effect of such acquisition, of such stocks or assets, 13 or of the use of such stock by the voting or granting of 14 proxies or otherwise, may be to lessen competition in any 15 way. 16 ‘‘Where a preponderance of the evidence (including 17 direct evidence) is adduced to demonstrate that the effect 18 of an acquisition may be substantially to lessen competi- 19 tion or to tend to create a monopoly, a plaintiff need nei- 20 ther establish market shares nor the concentration of any 21 particular market. 22 ‘‘No acquisition shall be presumed not to substan- 23 tially lessen competition or tend to create a monopoly only 24 because the parties to the acquisition do not compete di- 25 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1074 IS rectly against one another at the time of the acquisition.’’; 1 and 2 (3) in section 7a(a) (15 U.S.C. 18a(a)), in the 3 undesignated matter following paragraph 4 (2)(B)(ii)(III), by adding at the end the following: 5 ‘‘In the case of any transaction involving a person, 6 partnership, or corporation designated as a domi- 7 nant digital firm under section 10A of the Federal 8 Trade Commission Act, the person, partnership, or 9 corporation shall file notification as required by this 10 section.’’. 11 SEC. 4. RESTRICTIONS ON DOMINANT DIGITAL FIRMS. 12 The Federal Trade Commission Act (15 U.S.C. 41 13 et seq.) is amended by inserting after section 10 the fol- 14 lowing: 15 ‘‘SEC. 10A. RESTRICTIONS ON DOMINANT DIGITAL FIRMS. 16 ‘‘(a) DEFINITIONS.—In this section: 17 ‘‘(1) DOMINANT DIGITAL FIRM.—The term 18 ‘dominant digital firm’ means a person, partnership, 19 or corporation that— 20 ‘‘(A) provides a website or service acces- 21 sible through the internet; and 22 ‘‘(B) possesses dominant market power in 23 any market related to that website or service. 24 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1074 IS ‘‘(2) SEARCH FUNCTIONALITY.—The term 1 ‘search functionality’ means any feature or aspect of 2 a website or service accessible through the internet 3 that allows a user to input alphanumeric data in 4 order to retrieve and display a ranked list of relevant 5 results. 6 ‘‘(b) DESIGNATION AS A DOMINANT DIGITAL 7 FIRM.— 8 ‘‘(1) IN GENERAL.—The Commission shall have 9 power to designate a person, partnership, or cor- 10 poration as a dominant digital firm. 11 ‘‘(2) FACTORS TO BE CONSIDERED.—In deter- 12 mining whether a person, partnership, or corpora- 13 tion possesses dominant market power under para- 14 graph (1), the Commission shall consider factors in- 15 cluding— 16 ‘‘(A) dominance of the firm in other mar- 17 kets and durability of the dominance; 18 ‘‘(B) the extent to which the firm benefits 19 from government contracts or other privileges; 20 ‘‘(C) exclusivity agreements entered into by 21 the firm; 22 ‘‘(D) network effects; and 23 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1074 IS ‘‘(E) any ownership stake of the firm in 1 other entities within the supply chain of the 2 firm. 3 ‘‘(3) INVESTIGATIVE AUTHORITY.—In deter- 4 mining whether to designate a person, partnership, 5 or corporation as a dominant digital firm under 6 paragraph (1), the Commission shall have power to 7 issue investigative demands. 8 ‘‘(c) REQUIREMENTS.— 9 ‘‘(1) IN GENERAL.—Any designation made by 10 the Commission under subsection (b) shall be pre- 11 ceded by a notice and comment period in accordance 12 with section 553 of title 5, United States Code, ex- 13 cept that the required publication and service of any 14 designation by the Commission may be made not 15 less than 15 days before the effective date of the 16 designation. 17 ‘‘(2) JUDICIAL REVIEW.—Any designation made 18 by the Commission under subsection (b) shall be 19 subject to judicial review pursuant to section 706 of 20 title 5, United States Code. 21 ‘‘(d) PRESUMPTION AS UNFAIR OR DECEPTIVE ACT 22 OR PRACTICE.—Any acquisition by a person, partnership, 23 or corporation designated as a dominant digital firm under 24 this section, direct or indirect, of the whole or any part 25 VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1074 IS of the stock or other share capital or the whole or any 1 part of the assets of 1 or more persons engaged in com- 2 merce or in any activity affecting commerce, where such 3 acquisition exceeds $1,000,000 (as adjusted and published 4 for each fiscal year beginning after September 30, 2022, 5 in the same manner as provided in section 8(a)(5) of the 6 Clayton Act to reflect the percentage change in the gross 7 national product for such fiscal year compared to the gross 8 national product for the year ending September 30, 2021) 9 shall be presumed to be a unfair or deceptive act or prac- 10 tice. 11 ‘‘(e) UNFAIR OR DECEPTIVE ACT OR PRACTICE.—It 12 shall be an unfair or deceptive act or practice if a person, 13 partnership, or corporation designated as a dominant dig- 14 ital firm under this section— 15 ‘‘(1) provides search functionality; 16 ‘‘(2) promotes or demotes particular search re- 17 sults, on the basis of whether those results are affili- 18 ated or not affiliated with the dominant digital firm; 19 and 20 ‘‘(3) does not disclose such affiliation to users 21 of the search functionality.’’. 22 Æ VerDate Sep 11 2014 01:34 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S1074.IS S1074 kjohnson on DSK79L0C42PROD with BILLS