Despite over a century of changes since our antitrust laws were written, one thing has not changed: the importance of innovation for economic growth and the public well-being. New York State Senate Deputy Majority Leader Michael Gianaris has joined Democrats on the House Judiciary Committee and Republicans in the Trump Justice Department in using policy to take aim at the country's top innovators in order to score political points (see, TNH article Gianaris on House Judiciary Big Tech Antitrust Investigation Report, Oct. 9).
As currently constructed, Senator Gianaris' 21st Century Antitrust Act would radically alter the scope of antitrust law and jeopardize New York’s position as a global leader in innovation. The bill opens up businesses with a “dominant position” in any market to massive new liability. The problem is: any innovative new product by definition has a dominant position, therefore, any innovation would be subject to antitrust liability under this proposal.
Consider the company that eventually creates a vaccine for COVID-19. That company will undoubtedly have a dominant position in the market, at least at first, and under this proposal, that company would be exposed to massive new liabilities.
As written, the bill opens innovators to class action lawsuits from private, profit-seeking lawyers. These lawyers do not have the interests of the public in mind. Enforcement belongs in the hands of duly elected officials who operate in best interest of the public, not lawyers looking for the next big payday. Every year thousands of dubious class action lawsuits are filed, and every year lawyers take home millions while the public is left with pennies or coupons. This proposal would only expand that useless process, enriching the lawyers at the expense of innovators who serve consumers’ needs.
If the bill is passed and signed into law, the only innovators left operating in New York will be enterprising trial lawyers who devise the most novel ways to file new class-action lawsuits. Public officials should thoroughly investigate and prosecute price-fixing cartels and any abuses that lead to higher prices or inferior products. However, this proposal will only stifle innovation and enrich lawyers. Our antitrust efforts must be led by those with the public interest, not profits, at heart.
Tom Stebbins is Executive Director, Lawsuit Reform Alliance of New York.