Monopolization Deterrence Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2237 To authorize the Department of Justice and the Federal Trade Commission to seek civil monetary penalties to deter violations of section 2 of the Sherman Act, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 23, 2019 Ms. KLOBUCHAR (for herself and Mr. BLUMENTHAL) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To authorize the Department of Justice and the Federal Trade Commission to seek civil monetary penalties to deter violations of section 2 of the Sherman Act, 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 ‘‘Monopolization Deter- 4 rence Act of 2019’’. 5 SEC. 2. FINDINGS AND PURPOSES. 6 (a) FINDINGS.—Congress finds that— 7 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 2 •S 2237 IS (1) competitive markets are critical to ensuring 1 opportunity for all people in the United States; 2 (2) when companies compete, businesses offer 3 the highest quality and choice of goods and services 4 for the lowest possible prices to consumers and other 5 businesses; 6 (3) competition fosters small business growth, 7 reduces economic inequality, and spurs innovation; 8 (4) in the United States economy today, the ex- 9 ercise of market power is substantial and growing; 10 (5) anticompetitive exclusionary conduct is an 11 important source of market power and a substantial 12 threat to the United States economy; 13 (6) the exercise of market power tends to lessen 14 the rate of innovation, slow the growth of produc- 15 tivity, and increase economic inequality in the di- 16 rectly affected markets and economy-wide; 17 (7) the civil remedies currently available to cure 18 violations of section 2 of the Sherman Act (15 19 U.S.C. 2), including injunctions, equitable monetary 20 relief, and private damages, have not proven suffi- 21 cient, on their own, to deter anticompetitive exclu- 22 sionary conduct; and 23 (8) in some cases, effective deterrence requires 24 the imposition of civil penalties, alone or in combina- 25 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 3 •S 2237 IS tion with existing remedies, including structural re- 1 lief, behavioral relief, private damages, and equitable 2 monetary relief, including disgorgement and restitu- 3 tion. 4 (b) PURPOSES.—The purposes of this Act are— 5 (1) to enable the Department of Justice and the 6 Federal Trade Commission to seek civil monetary 7 penalties, in addition to existing remedies, for mo- 8 nopolization offenses and anticompetitive exclu- 9 sionary conduct; and 10 (2) to give the Department of Justice and the 11 Federal Trade Commission an additional enforce- 12 ment tool to craft remedies for individual violations 13 that are effective to deter future unlawful conduct 14 and proportionate to the gravity of the violation. 15 SEC. 3. CIVIL PENALTIES. 16 (a) CIVIL PENALTY AMENDMENTS.— 17 (1) SHERMAN ACT.—Section 2 of the Sherman 18 Act (15 U.S.C. 2) is amended— 19 (A) by striking ‘‘Every’’ and inserting ‘‘(a) 20 Every’’; and 21 (B) by adding at the end the following: 22 ‘‘(b)(1) Every person who violates this section shall 23 be liable to the United States for a civil penalty of not 24 more than the greater of— 25 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 4 •S 2237 IS ‘‘(A) 15 percent of the total United States reve- 1 nues of the person for the previous calendar year; or 2 ‘‘(B) 30 percent of the United States revenues 3 of the person in any part of the trade or commerce 4 related to or targeted by the unlawful conduct under 5 this section during the period of the unlawful con- 6 duct. 7 ‘‘(2) A civil penalty under this section may be recov- 8 ered in a civil action brought by the United States.’’. 9 (2) FEDERAL TRADE COMMISSION ACT.—Sec- 10 tion 5 of the Federal Trade Commission Act (15 11 U.S.C. 45) is amended by adding at the end the fol- 12 lowing: 13 ‘‘(o)(1) The Commission may commence a civil action 14 in a district court of the United States against any person, 15 partnership, or corporation for a violation of subsection 16 (a)(1) respecting an unfair method of competition that 17 constitutes a violation of section 2 of the Sherman Act 18 (15 U.S.C. 2) and to recover a civil penalty for such viola- 19 tion. 20 ‘‘(2) In an action under paragraph (1), any person, 21 partnership, or corporation found to have violated sub- 22 section (a)(1) respecting an unfair method of competition 23 that constitutes a violation of section 2 of the Sherman 24 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 5 •S 2237 IS Act (15 U.S.C. 2) shall be liable for a civil penalty of not 1 more than the greater of— 2 ‘‘(A) 15 percent of the total United States reve- 3 nues of the person, partnership, or corporation for 4 the previous calendar year; or 5 ‘‘(B) 30 percent of the United States revenues 6 of the person, partnership, or corporation in any line 7 of commerce related to or targeted by the unlawful 8 conduct described in paragraph (1) during the pe- 9 riod of the unlawful conduct.’’. 10 (b) RULE OF CONSTRUCTION.— 11 (1) CIVIL PENALTIES.—The civil penalties pro- 12 vided in subsection (b) of section 2 of the Sherman 13 Act (15 U.S.C. 2) and subsection (o) of section 5 of 14 the Federal Trade Commission Act (15 U.S.C. 45), 15 as added by subsection (a) of this section, are in ad- 16 dition to, and not in lieu of, any other remedy pro- 17 vided by Federal law, including under— 18 (A) section 4 or 16 of the Clayton Act (15 19 U.S.C. 15, 26); or 20 (B) section 13(b) of the Federal Trade 21 Commission Act (15 U.S.C. 53(b)). 22 (2) AUTHORITIES.—Nothing in this paragraph 23 may be construed to affect any authority of the At- 24 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 6 •S 2237 IS torney General or the Federal Trade Commission 1 under any other provision of law. 2 SEC. 4. JOINT CIVIL PENALTY GUIDELINES. 3 (a) IN GENERAL.—Not later than 1 year after the 4 date of enactment of this Act, the Attorney General and 5 the Federal Trade Commission shall issue joint guidelines 6 reflecting agency policies for determining the appropriate 7 amount of a civil penalty to be sought under subsection 8 (b) of section 2 of the Sherman Act (15 U.S.C. 2) and 9 subsection (o) of section 5 of the Federal Trade Commis- 10 sion Act (15 U.S.C. 45), as added by section 3(a) of this 11 Act, with the goal of promoting transparency and crafting 12 remedies for individual violations that are effective in de- 13 terring future unlawful conduct and proportionate to the 14 gravity of the violation. 15 (b) CONSIDERATIONS.—In establishing the guidelines 16 described in subsection (a), the Attorney General and the 17 Federal Trade Commission shall consider the relevant fac- 18 tors to be used for calculating an appropriate civil penalty 19 for a particular violation, including— 20 (1) the volume of commerce affected; 21 (2) the duration and severity of the unlawful 22 conduct; 23 (3) any action taken or attempted by the person 24 to conceal the unlawful conduct; 25 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 7 •S 2237 IS (4) the extent to which the unlawful conduct 1 was egregious or a clear violation of the law; 2 (5) whether the civil penalty is to be applied in 3 combination with other remedies for the unlawful 4 conduct, including structural remedies, behavioral 5 conditions, or equitable monetary relief, including 6 disgorgement and restitution; 7 (6) whether the person has previously engaged 8 in the same or similar anticompetitive conduct; and 9 (7) whether the person undertook the conduct 10 in violation of a preexisting consent decree or court 11 order. 12 SEC. 5. FEDERAL TRADE COMMISSION LITIGATION AU- 13 THORITY. 14 Section 16(a)(2) of the Federal Trade Commission 15 Act (15 U.S.C. 56(a)(2)) is amended— 16 (1) in subparagraph (D), by striking ‘‘or’’ at 17 the end; 18 (2) in subparagraph (E)— 19 (A) by moving the margins 2 ems to the 20 left; and 21 (B) by striking the semicolon and inserting 22 ‘‘; or’’; and 23 (3) by inserting after subparagraph (E) the fol- 24 lowing: 25 VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS 8 •S 2237 IS ‘‘(F) to recover civil penalties under section 1 5(o) of this Act;’’. 2 Æ VerDate Sep 11 2014 03:55 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S2237.IS S2237 kjohnson on DSK79L0C42 with BILLS