Anti-trust laws were created to encourage companies to compete and keep one single company from gaining complete control or monopolizing the market.
New York’s anti-trust laws were first enacted in the 1890s. Because of this, Deputy Senate Majority Leader Mike Gianaris is proposing a new Anti-Trust Act, calling the old laws broken.
“They were written over a century ago. They tended to deal with an economy that no longer exists. And many of the abuses that we see today were not even contemplated back then," said Senator Gianaris.
The 21st Century Antitrust Act being proposed would first increase civil and criminal penalties on companies that break these laws. It would also allow for private class action lawsuits against companies who are monopolizing or dominating the market. Attorney General Letitia James says these changes are crucial.
"Competition breeds innovation, competitive pricing and consumer choice,” Attorney General James said. “By protecting competition our anti-trust laws have promoted innovation and that’s allowed the U.S. to become the home of some of the most influential and innovative companies in the world."
AG James continued, “It’s really critically important that we continue to have an open market and currently right now the tools are not adequate and insufficient to deal with the types of anti-competitive conduct we are seeing.”
However Tom Stebbins, executive director of Lawsuit Reform Alliance, says this term ‘dominance’ is where things start to get tricky. Stebbins says this opens the door for anyone to sue a dominant company in a marketplace, even competitors.
“Think about the company that eventually creates the COVID-19 vaccine,” Stebbins explained. “That company would be dominant in the market and they would under this proposal open themselves up to lawsuits from every two bit lawyer you see on a bus.”
This sentiment was shared by Kathy Wylde, president of Partnership for New York City, who agreed that the term ‘dominance’ should be clarified; otherwise this would limit new ideas and businesses from being created.
“If there’s a startup and there is only one company in the field, they are going to have 100 percent for a while,” Wylde said. “Are they subject to litigation if someone doesn’t like what they are doing?”
“It could actually make competitors file these lawsuits against these companies,” Stebbins also added. “And so rather than actually having a consumer grief you have a company who is behind on innovation who sues the innovator for their new dominant position. And they’re using the courts rather than the market to establish their position within the market.”
The 21st Century Antitrust Act is still in committee in both houses.