Antitrust Laws: What You Need to Know and Why it's Important for Government Affairs

With lawmakers cracking down on tech companies or considering an overhaul of decades-old antitrust laws, government affairs professionals increasingly need to be aware of every move around this issue and how it can impact their organizations.

Read on to learn about the latest in antitrust policy and what it could mean for your industry.

Antitrust Laws: How We Got Here

Antitrust laws are intended to promote economic efficiency and choice for consumers in a variety of ways and are meant to help protect the free market. The laws cover issues like clearance of mergers and acquisitions and reviews of business conduct to discourage anti-competitive business practices such as price fixing.

For the past 40 years, the widely-held belief has been that antitrust laws should promote lower prices and consumer welfare, according to Adam Biegel, co-chair of the antitrust team at Alston & Bird.

Key antitrust laws include the Sherman Antitrust Act of 1890, which outlaws monopolies and prescribes free competition, the Clayton Antitrust Act of 1914, which defines unethical business practices, and the Federal Trade Commission Act in 1914, which created the FTC. These three core federal antitrust laws are still in effect more than 100 years later. Another notable law was the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires parties to report large transactions to government bodies for review.

Shifting Approaches to Antitrust Enforcement

It has been decades since antitrust laws were materially altered. Over the last 40 years, opinions on antitrust laws have swung mildly with each administration, but that could change soon, as the Biden administration is pushing for changes to antitrust laws and several bills in Congress are gaining traction.

Significant changes to antitrust laws are "more likely now than they have been in any period in the past," Biegel says. The current administration has "called for a wholesale revisiting of the scope and purpose of antitrust laws" and for vastly increased enforcement of current laws, according to Biegel. There is a large bipartisan focus on rewriting these antitrust laws, as well as a focus on using them as a tool to address general issues of societal concern, such as economic justice and environmental, social, and corporate governance (ESG).

While antitrust is a slow-moving area of law that is infrequently updated, Stewart Verdery, CEO of Monument Advocacy, agrees change could be in store. "The supporters of antitrust reform are at about the 15-yard line," Verdery said in a FiscalNote event. "It's going to be really hard to get from there to the goal line, but they're making a lot of progress."

Lina Khan, chairperson of the Federal Trade Commission (FTC), has been an outspoken advocate of tighter antitrust laws and, in particular, curbing the dominance of big tech companies. Some antitrust proposals are geared explicitly toward big tech, aiming to create tech-oriented conduct reforms and restrict anti-competitive business practices. Proposed antitrust statutes would mean companies that have a certain share within an industry would be presumed to be anti-competitive, or that large companies would face more filing fees, a longer waiting period, or the burden to prove why a deal isn't anti-competitive.

So what's different today? While antitrust laws remained fairly consistent for decades, smaller policy shifts and approaches to how those laws are enforced have changed.

During the pandemic, times of economic stress and uncertainty caused policymakers to consider ways to improve the standing of the American economy, with some arguing that pandemic-era issues like supply chain backups wouldn't be such a severe problem if there was more enforcement of antitrust laws and regulations.

Tech platforms rose to prominence in enabling a hybrid workforce to accomplish tasks from anywhere. Large chunks of consumers' everyday lives, from banking and shopping to school and health, depend on technology. And regulators and investigators are increasingly eyeing whether companies are using the data entrusted to them in ways that harm consumers, stifle competition, or hamper innovation.

"The Biden administration is pursuing a whole of government approach that seeks to promote competition across multiple government agencies that don't always put competition front and center," says Michael Carrier, a distinguished professor at Rutgers Law School. "Also, the heads of the antitrust agencies are pursuing a more aggressive approach than previous administrations have."

Why Antitrust Laws Matter for Government Relations Professionals

While antitrust laws certainly have an impact on established companies, emerging companies can also be affected by them, as it may become harder for big companies to acquire smaller startups. “This could skew the incentives for people to engage in startup activity” and create higher barriers to acquisitions, Biegel points out.

Knowledge of antitrust policy and compliance is crucial for government affairs professionals, given that the current administration has made clear they want to use competition to improve the lives of Americans in essentially every industry. No matter what market you’re in, “speaking to the competitive benefits of whatever position you’re arguing will likely be met with a receptive audience,” Biegel says.

Government affairs professionals should also note that antitrust impacts all forms of competition, not just pricing or mergers and acquisitions. More antitrust advocates are arguing that antitrust includes paying workers a good wage, being a socially beneficial company, and the business’ impact on the environment. “Many flavors of competition are on the table, not just prices,” Biegel says.

When it comes to antitrust compliance, government affairs professionals should be aware that there is broad immunity for petitioning activity, so rival organizations can lawfully come together to petition and lobby for issues on the Hill.

But there are still lines that shouldn’t be crossed because they might violate antitrust laws, Biegel warns. Government affairs professionals shouldn’t share too much information with other organizations about their independent business activities, for example, or try to coordinate business activities. “Those are improper activities that wouldn’t be covered by that petitioning immunity,” Biegel says. Antitrust compliance training is offered in many companies to provide employees with an understanding of acceptable corporate practices.