The California Chamber of Commerce made the case this week that California’s antitrust and competition laws do not need to be radically changed to target single firms that improve their market position through legal and naturally competitive means.
The Legislature in 2022 directed the California Law Revision Commission to examine whether California should make major changes to its antitrust and competition laws, affecting every industry in the state, from large technology companies to media, health care, grocery and small businesses, among many others.
The Commission scheduled three hearings on seven subject matter topics, with the goal of providing recommendations to the Legislature by the end of the year. The Commission convened working groups to prepare briefings on the subject matter topics. The first topic, Single Firm Conduct, was considered by the Commission on May 2.
CalChamber Testimony
Eric Enson, an antitrust attorney with Crowell & Moring LLP representing CalChamber, in testimony submitted to the Commission, stated that the “legislative proposal” prepared by the working group rejects over a century of federal and state precedent designed to identify truly anticompetitive conduct and fails to distinguish between what is and what is not anticompetitive, thereby potentially outlawing the type of aggressive competition that the antitrust laws were designed to promote and that ultimately benefit consumers.
Enson also noted that the proposal was fundamentally flawed because it is not based on a demonstrated need for reform, but is based merely on anecdotal and unsupported beliefs that competition in California could be more robust, and it does not provide any economic analysis of the likely impact of the reforms.
The proposal’s imprecision and lax standards, according to Enson, will chill competition and will lead to increased litigation that will result in inconsistent rulings among courts, together with rulings restricting pro-competitive conduct, making doing business in California more expensive, riskier, and less desirable, all of which is bad for California consumers and workers.
Enson also argued that California antitrust officials, and private citizens, can and have used federal antitrust laws to remedy unlawful behavior by single firms.
Second Topic
The second working group topic considered by the Commission on May 2 was Concentration in California. The working group paper on this topic is a recitation of “case studies” of targeted industries, plus labor practices, that sheds no light on California practice, and indeed demonstrates how current federal and state laws and enforcement sufficiently ensure robust and fair competition.
Law Revision Comission
The Law Revision Commission is organized to study selected laws to discover defects and anachronisms and recommends legislation to make needed reforms. This study is among the most far-reaching projects the Commission has undertaken, as measured by its potential effects on the California economy.
The seven Commission-appointed working groups have developed papers on the following subjects: Single Firm Conduct, Concentration in California, Mergers and Acquisitions, Technology Platforms, Concerted Action, Consumer Welfare Standard, and Enforcement and Exemptions.
Coalition
The CalChamber is organizing a coalition of industry associations and individual businesses to address this looming issue, which could have far-reaching implications for the competitive marketplace in the state.
The coalition will enlist a full suite of services to improve the California business community’s capacity to engage on this issue before the Commission, and ultimately before the Legislature.
