In an op-ed published in The Hill this week, ATR Federal Affairs Manager Tom Hebert cautioned against passing Senator Klobuchar’s “Competition and Antitrust Law Enforcement Reform Act.” 

This legislation would invert the burden of proof for certain monopolization cases, upending decades of antitrust enforcement precedent and stacking the deck in favor of antitrust enforcers and trial lawyers. Instead of the burden being on the plaintiff to prove that business conduct is anti-competitive, this bill puts the burden of proof on companies above a certain market cap to prove that their conduct would not hurt competition. 

Burden-shifting would throttle mergers and acquisitions and discourage larger companies from acquiring startups, a key driver of economic growth and innovation. Hebert explains that: 

In practice, this would effectively ban certain companies from engaging in mergers and acquisitions, a routine business transaction that drives economic growth and innovation. This prohibition would likely lead to fewer startups, half of which say their most realistic long-term goal is to be acquired by a larger firm. Without the potential for acquisition, entrepreneurs would have a lot less incentive to take on the risk that comes with starting a new company.

This proposal would hinder competition, as companies under the threat of predatory litigation would be more likely to pull punches when competing with rival firms. This would lead to higher prices and less choices for American shoppers. 

Additionally, Hebert points out that the only people that gain from this proposal are government antitrust enforcers and trial lawyers. The bill would give the Biden FTC and DOJ the unfettered ability to declare routine business activity illegal for political reasons. Instead of a neutral application of antitrust law, the left would usher in a new wave of politicized antitrust enforcement.  

Additionally, private trial lawyers would also see even more incentives than they already do to accuse companies of anti-competitive behavior in court. Hebert points out that:

Inverting the burden of proof would also create a cottage industry for greedy trial lawyers looking to profit off of gaming the American legal system. The potential damages from these suits can be enormous, and plaintiffs can accuse companies of anti-competitive behavior in court regardless of innocence or guilt. Even companies who have done nothing wrong would be forced to pay large sums to avoid an adverse ruling in court.

Hebert urges that Republicans maintain a “light-touch antitrust approach” that keeps the current competitive business environment and consumer welfare standard in place. 

Click here to read the full op-ed.