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ACR-95 California Law Revision Commission: studies: antitrust.(2021-2022)

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ACR95:v98#DOCUMENT

Revised  August 19, 2021
Amended  IN  Assembly  July 08, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Concurrent Resolution
No. 95


Introduced by Assembly Members Cunningham and Wicks
(Coauthor: Assembly Member Lorena Gonzalez)

June 24, 2021


Relative to the California Law Revision Commission.


LEGISLATIVE COUNSEL'S DIGEST


ACR 95, as amended, Cunningham. California Law Revision Commission: studies: antitrust.
Existing law requires the California Law Revision Commission to study, and limits the commission to studying, topics approved by resolution of the Legislature or by statute.
This measure would grant approval to the commission to study new prescribed topics relating to antitrust law and its enforcement. The measure would require the commission, before commencing work on this project, to submit a detailed description of the scope of work to specified policy committees of the Legislature, and, if during the course of the project there is a major change to the scope of work, to submit a description of the change.
Fiscal Committee: YES  

WHEREAS, On June 3, 2019, the House of Representatives’ Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law, launched a bipartisan investigation into competition in digital markets which in part concluded: “...we firmly believe that the totality of the evidence produced during this investigation demonstrates the pressing need for legislative action and reform.”; and
WHEREAS, The American Antitrust Institute published a policy brief in 2016 finding that “[t]here is a growing consensus that inadequate antitrust policy has contributed to the concentration problem and associated inequality effects.”; and
WHEREAS, In February 2017, the director of the Open Markets program at the New America Foundation, stated: “The idea that America has a monopoly problem is now beyond dispute.”; and
WHEREAS, Concern about market power concentration has reached even the so-called “Chicago School,” leading The Economist magazine’s April 15, 2017, headline, about an antitrust conference held there, to read “The University of Chicago worries about a lack of competition. Its economists used to champion big firms, but the mood has shifted”; and
WHEREAS, Federal legislative reforms are being considered. On February 4, Senator Amy Klobuchar introduced a comprehensive bill called the “Competition and Antitrust Law Enforcement Reform Act of 2021” that would make wholesale changes to federal antitrust jurisprudence; and
WHEREAS, While much of current federal antitrust law is premised upon market concentration leading to a rise in prices, the business models of some technology companies in part relies upon consumers paying with their data, rather than their dollars, such that price alone may no longer be a viable basis upon which to base antitrust analysis and enforcement; and
WHEREAS, New York State is considering legislation that would fundamentally rewrite its antitrust laws. The legislative findings in the proposed act in part state that “The legislature hereby finds and declares that there is great concern for the growing accumulation of power in the hands of large corporations … It is time to update, expand and clarify our laws …”; and
WHEREAS, California should be uniquely sensitive to the threat of market concentration because much of early state history was shaped by monopoly power wielded by the “Big Four” of Huntington, Crocker, Stanford, and Hopkins, who, through the Central Pacific Railroad, acted as monopolistic gatekeepers for businesses that needed to bring goods to market. California therefore should not depend on federal laws or federal enforcement to protect its citizens from monopolistic anticompetitive behavior; and
WHEREAS, No California statute deals expressly with monopolization or attempted monopolization by one giant company; and
WHEREAS, California’s primary antitrust statute, the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), unlike Section 2 of the federal Sherman Antitrust Act of 1890 (Sections 1 to 7, inclusive, of Title 15 of the United States Code; Code, hereafter the Sherman Act), does not apply to monopoly conduct of single powerful companies and for the same reason companies, and, for the same reason, does not address mergers; mergers and contains statutory exemptions that lessen its impact; and
WHEREAS, While arguably such claims may be brought under California’s Unfair Competition Law (Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code) or California’s Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code), neither expressly addresses monopolization and foundational issues such as what is needed for standing to bring such claims and the damages available are unsettled; and
WHEREAS, The California Law Revision Commission is authorized to study topics that have been referred to the commission for study by concurrent resolution of the Legislature or by statute; now, therefore be it
Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature approves for study by the California Law Revision Commission the following new topics:
(1) Whether the law should be revised to outlaw monopolies by single companies as outlawed by Section 2 of the Sherman Act, as proposed in New York State’s “Twenty-First Century Anti-Trust Act” and in the “Competition and Antitrust Law Enforcement Reform Act of 2021” introduced in the United States Senate, or as outlawed in other jurisdictions.
(2) Whether the law should be revised in the context of technology companies so that analysis of antitrust injury in that setting reflects competitive benefits such as innovation and permitting the personal freedom of individuals to start their own businesses and not solely whether such monopolies act to raise prices.
(3) Whether the law should be revised in any other fashion such as approvals for mergers and acquisitions and any limitation of existing statutory exemptions to the state’s antitrust laws to promote and ensure the tangible and intangible benefits of free market competition for Californians; and be it further
Resolved, That before commencing work on this project the California Law Revision Commission shall submit a detailed description of the scope of work to the chairs and vice chairs of the Assembly Committee on Judiciary and the Senate Committee on Judiciary, and any other policy committee that has jurisdiction over the subject matter of the study, and if during the course of the project there is a major change to the scope of work, shall submit a description of the change; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the California Law Revision Commission and to the author for appropriate distribution.
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REVISIONS:
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