By Jesse Markham and Steve Smith

Originally published April 2005

On March 31, 2005, the Antitrust Modernization Commission ("Commission"), as part of its statutory mandate to examine whether the U.S. antitrust laws need to be modernized, released a projected timetable for the remaining two years of its work, which will culminate in the issuance of a report to Congress and the President in April 2007. Between April 2005 and February 2006, the Commission and its ten study groups will hold public hearings to examine an initial list of twenty-five antitrust issues. Over the next several weeks, the Commission will schedule specific dates for these hearings and request public comment from interested parties on these issues. If your organization is interested in learning more about the Commission’s activities on a particular topic of interest or submitting comments to the Commission, please contact Jesse Markham (jmarkham@mofo.com) or Steve Smith (ssmith@mofo.com).

The Commission’s study of potential revisions to the antitrust laws will be conducted by ten working groups, and the initial issues selected for study cover a broad range of subjects, including: ·

  • Enforcement Institutions: the role of dual enforcement by the FTC and Justice Department and the role of state attorneys general.

  • Merger Enforcement: the benefits and burdens of the HSR merger review process (as well as the transparency of the decision process) and the consideration of potential efficiencies.

  • Remedies: rights and remedies in private litigation (i.e., treble damages, contribution, offset, joint and several liability and rights of indirect purchasers); remedies available to governmental agencies.

  • New Economy Issues: antitrust analysis applied to industries characterized by significant technological innovation, and the balancing of the protection of IP rights and the promotion of competition.

  • Robinson-Patman Act: the repeal or modification of the Robinson-Patman Act, including the repeal of criminal penalties.

  • Exclusionary Conduct: the standards for determining exclusionary conduct, particularly for single firm conduct.

  • Immunities and Exemptions: whether to maintain or change the Noerr-Pennington, state action and a host of other immunity doctrines for specific industries and programs.

  • Regulated Industries: the role of regulatory agencies in antitrust enforcement and appropriate standards to apply to regulated entities. ·

  • Criminal: amendments of criminal fines for violations of antitrust statutes.

  • International: clarification of the extraterritorial application of U.S. antitrust laws and implementation of procedures to cooperate better with foreign enforcement officials.

While the list of topics to be studied and the memoranda submitted by the working groups to the Commission with recommended issues for study provide some insight into the views of the Commission, it is difficult to predict at this stage what actions, if any, the Commission will recommend or whether Congress would adopt any of them.

Additional information about the Commission and a complete list of the topics chosen by the Commission is set forth below and can be found at the Commission’s website: http://www.amc.gov/.

About the Commission

The Antitrust Modernization Commission was created pursuant to the Antitrust Modernization Commission Act of 2002 ("Act"). The Commission consists of twelve members, four appointed by the President, four appointed by the leadership of the Senate, and four appointed by the leadership of the House of Representatives. The Act directs the Commission:

  1. to examine whether the need exists to modernize the antitrust laws and to identify and study related issues;

  2. to solicit views of all parties concerned with the operation of the antitrust laws;

  3. to evaluate the advisability of proposals and current arrangements with respect to any issues so identified; and,

  4. to prepare and submit to Congress and the President a report.

The Commission’s report is to contain "a detailed statement of the findings and conclusions of the Commission, together with recommendation for legislative or administrative action the Commission considers to be appropriate." The Commission is authorized to hold hearings, take testimony, and obtain data and support services from any executive agency. The Commission has held three public meetings to date, primarily to establish the eight working groups and develop the initial list of issues to be studied by the Commission. In addition, prior to finalizing the initial issues to study, the Commission received comments from twenty-five interested parties, including the ABA Section of Antitrust Law and the Assistant Attorney General for Antitrust (R. Hewitt Pate).

The Commission’s web site is http://www.amc.gov. The site contains general information about the Commission and the Act, including information about the Commission members, meetings, and copies of all working group papers and public comments received to date.

On January 18, 2005, the Antitrust Modernization Commission ("Commission") selected an initial list of twenty-five issues to study over the next year as part of its statutory mandate to examine whether the U.S. antitrust laws need to be modernized. The Commission also identified four additional issues for study, but deferred or postponed their inquiry into these areas to conduct further fact-finding and development of the issues.

Issues Selected for Study (arranged by Study Group)

Enforcement Institutions

  1. What changes, if any, should be made to the enforcement role that the states play with respect to federal antitrust laws?
  2. Should merger enforcement at the federal level continue to be administered by two separate agencies, the U.S. Department of Justice and the Federal Trade Commission? If so, should merger review responsibility be divided by industry between DOJ and FTC?
  3. To the extent that dual merger enforcement continues, should steps be taken to eliminate differences in treatment arising out of which agency reviews a merger?
  4. What role, if any, should private parties and state attorneys general play in merger enforcement? Should merger enforcement be limited to the federal level, or should other steps be taken to ensure that a single merger will not be subject to challenge by multiple private and government enforcers?

Merger Enforcement

  1. Should the Hart-Scott-Rodino merger review process be revised to address issues relating to the number and type of transactions requiring pre-merger notification, the length of investigations, the burden imposed by "Second Requests" and civil investigative demands on the merging companies and third parties, and transparency of the enforcement agencies’ decisional process?
  2. Are the federal enforcement agencies and courts appropriately considering efficiencies expected to be realized from transactions?
  3. Has current U.S. merger enforcement policy — including as expressed in the Horizontal Merger Guidelines — been effective in ensuring competitively operating markets without unduly hampering the ability of companies to operate efficiently and compete in global markets?
  4. Should steps be taken to attempt to harmonize further the procedural aspects of review of mergers by the United States and non-U.S. competition authorities in order to ensure a more timely and less burdensome multi-jurisdictional review of international mergers? [Deferred for additional fact-finding]

Remedies

  1. Should the substantive law and procedures applicable to indirect purchaser litigation arising out of competition-related offenses be modified to reduce the complexity and inefficiency now present?
  2. What should be the remedies and legal liabilities in private antitrust proceedings?
  3. Should government civil remedies be expanded, restricted, or clarified?

New Economy Issues

  1. Should industries involving significant technological innovation be treated differently under the antitrust laws?
  2. How does the current intellectual property regime affect competition?
  3. Are there features of the modern (or "new") economy that warrant different treatment — whether harsher or more lenient — of single-firm or vertical conduct in "new economy" industries?

Robinson-Patman Act

  1. Should Section 3 of the Robinson-Patman Act (providing for criminal penalties) be repealed?
  2. Should the Robinson-Patman Act be repealed in whole or in part, or otherwise be modified?

Exclusionary Conduct

  1. Should the substantive standards for determining whether conduct is exclusionary or anticompetitive under either Section 1 or Section 2 of the Sherman Act be revisited?

Immunities and Exemptions

  1. Should antitrust immunities and exemptions be eliminated if not justified by the benefits they provide, or should they otherwise be time-limited?
  2. Should the state action doctrine be clarified or otherwise changed?
  3. Should the Noerr-Pennington doctrine be clarified or otherwise changed?
  4. Should the antitrust exemptions for exporters set forth in the Webb-Pomerene Act and Title III of the Export Trading Company Act be eliminated?

Regulated Industries

  1. How should responsibility for the enforcement of antitrust laws in regulated industries be divided between the antitrust agencies and other regulatory agencies?
  2. What is the appropriate standard for determining the extent to which the antitrust laws apply to regulated industries where the regulatory structure contains no specific antitrust exemption and/or contains a specific antitrust savings clause?
  3. Should Congress and regulatory agencies set industry-specific standards for particular antitrust violations that may conflict with general standards for the same violations?

Criminal

  1. Should the statutes establishing criminal fines for price fixing and related offenses be amended to reflect recent Supreme Court decisions casting doubt on the status of the Federal Sentencing Guidelines? [Study postponed]

International

  1. Should the FTAIA be amended to clarify the circumstances in which the Sherman Act applies to extraterritorial anticompetitive conduct?
  2. Are there technical or procedural changes that the United States could implement to facilitate further coordination with foreign antitrust enforcement authorities?

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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