Bill Text: NY S00933 | 2021-2022 | General Assembly | Amended
Bill Title: Relates to actions or practices that establish or maintain a monopoly, monopsony or restraint of trade; authorizes a class action lawsuit in the state anti-trust law.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Engrossed - Dead) 2022-05-25 - referred to economic development [S00933 Detail]
Download: New_York-2021-S00933-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 933--C Cal. No. 131 2021-2022 Regular Sessions IN SENATE (Prefiled) January 6, 2021 ___________ Introduced by Sens. GIANARIS, SALAZAR, BIAGGI, HOYLMAN, JACKSON, KAVANAGH, MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Consumer Protection in accordance with Senate Rule 6, sec. 8 -- reported favor- ably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading -- again amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the general business law, in relation to actions or practices that establish or maintain a monopoly, monopsony or restraint of trade, and in relation to authorizing a class action lawsuit in the state anti-trust law The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "Twenty- 2 First Century Anti-Trust Act". 3 § 2. Legislative findings. The legislature hereby finds and declares 4 that there is great concern for the growing accumulation of power in the 5 hands of large corporations. While technological advances have improved 6 society, these companies possess great and increasing power over all 7 aspects of our lives. Over one hundred years ago, the state and federal 8 governments identified these same problems as big businesses blossomed 9 after decades of industrialization. Seeing those problems, the state 10 and federal governments enacted transformative legislation to combat 11 cartels, monopolies, and other anti-competitive business practices. It 12 is time to update, expand and clarify our laws to ensure that these 13 large corporations are subject to strict and appropriate oversight by 14 the state. The legislature further finds and declares that unilateral EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03654-11-2S. 933--C 2 1 actions which seek to create a monopoly or monopsony are as harmful as 2 contracts or agreements of multiple parties to do the same and should be 3 treated similarly under the law. After monopolies or monopsonies have 4 been established, it is typically too late to repair or mitigate the 5 damage which has been done. Accordingly, mere attempts to create monopo- 6 lies or monopsonies through anti-competitive conduct should also be 7 treated as actions contrary to the interests of the people of the state 8 of New York and should be penalized accordingly. The legislature 9 further finds and declares that effective enforcement against unilateral 10 anti-competitive conduct has been impeded by courts, for example, apply- 11 ing narrow definitions of monopolies and monopolization, limiting the 12 scope of unilateral conduct covered by the federal anti-trust laws, and 13 unreasonably heightening the legal standards that plaintiffs and govern- 14 ment enforcers must overcome to establish violations of those laws. The 15 legislature further finds and declares that one of the purposes of the 16 state's anti-trust laws is to ensure that our labor markets are open and 17 fair. The legislature further finds and declares that anti-competitive 18 practices harm great numbers of citizens and therefore must ensure that 19 class actions may be raised in anti-trust suits. 20 § 3. Section 340 of the general business law, as amended by chapter 12 21 of the laws of 1935, subdivision 1 as amended by chapter 893 of the laws 22 of 1957, subdivision 2 as amended by chapter 805 of the laws of 1984, 23 subdivisions 3 and 4 as renumbered by chapter 502 of the laws of 1948, 24 subdivision 5 as amended by chapter 333 of the laws of 1975 and subdivi- 25 sion 6 as amended by chapter 31 of the laws of 1999, is amended to read 26 as follows: 27 § 340. Contracts or agreements for monopoly, monopsony, or in 28 restraint of trade illegal and void. 1. Every contract, agreement, 29 arrangement or combination whereby 30 A monopoly or monopsony in the conduct of any business, trade or 31 commerce or in the furnishing of any service in this state, is or may be 32 established or maintained, or whereby 33 Competition or the free exercise of any activity in the conduct of any 34 business, trade or commerce or in the furnishing of any service in this 35 state is or may be restrained or whereby 36 For the purpose of establishing or maintaining any such monopoly, 37 monopsony, or unlawfully interfering with the free exercise of any 38 activity in the conduct of any business, trade or commerce or in the 39 furnishing of any service in this state any business, trade or commerce 40 or the furnishing of any service is or may be restrained, is hereby 41 declared to be against public policy, illegal and void. 42 2. (a) It shall be unlawful for any person or persons to monopolize or 43 monopsonize, or attempt to monopolize or monopsonize, or combine or 44 conspire with any other person or persons to monopolize or monopsonize 45 any business, trade or commerce or the furnishing of any service in this 46 state. 47 (b) It shall be unlawful for any person or persons with a dominant 48 position in the conduct of any business, trade or commerce, in any labor 49 market, or in the furnishing of any service in this state to abuse that 50 dominant position. 51 (i) In any action brought under this paragraph, a person's dominant 52 position may be established by direct evidence, indirect evidence, or a 53 combination of the two. 54 (1) Examples of direct evidence include, but are not limited to, the 55 unilateral power to set prices, terms, conditions, or standards; the 56 unilateral power to dictate non-price contractual terms without compen-S. 933--C 3 1 sation; or other evidence that a person is not constrained by meaningful 2 competitive pressures, such as the ability to degrade quality without 3 suffering reduction in profitability. In labor markets, examples of 4 direct evidence include, but are not limited to, the use of non-compete 5 clauses or no-poach agreements, or the unilateral power to set wages. 6 (2) A person's dominant position may also be established by indirect 7 evidence such as the person's share of a relevant market. A person who 8 has a share of forty percent or greater of a relevant market as a seller 9 shall be presumed to have a dominant position in that market under this 10 paragraph. A person who has a share of thirty percent or greater of a 11 relevant market as a buyer shall be presumed to have a dominant position 12 in that market under this paragraph. 13 (3) If direct evidence is sufficient to demonstrate that a person has 14 a dominant position or has abused such a dominant position, no court 15 shall require definition of a relevant market in order to evaluate the 16 evidence, find liability, or find that a claim has been stated under 17 this paragraph. 18 (ii) In any action brought under this paragraph, abuse of a dominant 19 position may include, but is not limited to, conduct that tends to fore- 20 close or limit the ability or incentive of one or more actual or poten- 21 tial competitors to compete, such as leveraging a dominant position in 22 one market to limit competition in a separate market, or refusing to 23 deal with another person with the effect of unnecessarily excluding or 24 handicapping actual or potential competitors. In labor markets, abuse 25 may include, but is not limited to, imposing contracts by which any 26 person is restrained from engaging in a lawful profession, trade, or 27 business of any kind, or by restricting the freedom of workers and inde- 28 pendent contractors to disclose wage and benefit information. 29 (iii) Evidence of pro-competitive effects shall not be a defense to 30 abuse of dominance and shall not offset or cure competitive harm. 31 (c) (i) The attorney general is hereby empowered to adopt, promulgate, 32 amend, and repeal rules, as such term is defined in paragraph (a) of 33 subdivision two of section one hundred two of the state administrative 34 procedure act, to carry out the purposes of paragraph (b) of this subdi- 35 vision, including those considerations specified in the findings and 36 declarations of the legislature for this act. 37 (ii) Before any such rule shall take effect, at such time that the 38 attorney general is prepared to file a notice of adoption pursuant to 39 subdivision five of section two hundred two of the state administrative 40 procedure act, the attorney general shall transmit a copy of the rule in 41 its final form to the temporary president of the senate and the speaker 42 of the assembly and, in addition, shall provide any relevant information 43 regarding the need for such rule. Such proposed rule, or proposed repeal 44 of a rule, is subject to the denial by both houses of the legislature 45 and shall take the form of a resolution. Each house of the legislature 46 shall have sixty days following the transmission of such rule to issue 47 denial by resolution or take no action. Such rule shall not take effect 48 if both houses pass a resolution denying such proposed rule within the 49 time prescribed by this subparagraph. 50 (iii) The attorney general shall issue guidance on how it will inter- 51 pret market shares and other relevant market conditions to achieve the 52 purposes of paragraph (b) of this subdivision while taking into account 53 the important role of small and medium-sized businesses in the state's 54 economy. The attorney general may issue other guidance with respect to 55 paragraph (b) of this subdivision.S. 933--C 4 1 (iv) Nothing in this section shall be deemed to diminish the jurisdic- 2 tion of the public service commission. 3 3. Subject to the exceptions hereinafter provided in this section, the 4 provisions of this article shall apply to licensed insurers, licensed 5 insurance agents, licensed insurance brokers, licensed independent 6 adjusters and other persons and organizations subject to the provisions 7 of the insurance law, to the extent not regulated by provisions of arti- 8 cle twenty-three of the insurance law; and further provided, that noth- 9 ing in this section shall apply to the marine insurances, including 10 marine protection and indemnity insurance and marine reinsurance, 11 exempted from the operation of article twenty-three of the insurance 12 law. 13 [3.] 4. The provisions of this article shall not apply to cooperative 14 associations, corporate or otherwise, of farmers, gardeners, or dairy- 15 men, including live stock farmers and fruit growers, nor to contracts, 16 agreements or arrangements made by such associations, nor to bona fide 17 labor unions, nor to the creation, production, and dissemination of a 18 single expressive work that is copyrighted, including but not limited 19 to, a streaming series, television programs and or motion pictures. 20 [4.] 5. The labor of human beings shall not be deemed or held to be a 21 commodity or article of commerce as such terms are used in this section 22 and nothing herein contained shall be deemed to prohibit or restrict the 23 right of workingmen, including employees and independent contractors, to 24 combine in unions, organizations and associations, not organized for the 25 purpose of profit, to establish or maintain union apprenticeship or 26 training programs that may lead to any government-issued trade license, 27 or to bargain collectively concerning their wages and the terms and 28 conditions of their employment. Nothing in this section shall be deemed 29 to prevent or create liability with respect to any actions to comply 30 with article eight or nine of the labor law. A bona fide collective 31 bargaining agreement, project labor agreement or any other agreement 32 lawful under 29 U.S.C. 158(f), as amended, or any term therein, shall 33 not be considered evidence of a violation or dominance under this 34 section. Project labor agreement shall have the meaning specified in 35 section two hundred twenty-two of the labor law. 36 [5.] 6. An action to recover damages caused by a violation of this 37 section must be commenced within four years after the cause of action 38 has accrued. The state, or any political subdivision or public authority 39 of the state, or any person who shall sustain damages by reason of any 40 violation of this section, shall recover three-fold the actual damages 41 sustained thereby, as well as costs not exceeding ten thousand dollars, 42 and reasonable attorneys' fees. At or before the commencement of any 43 civil action by a party other than the attorney-general for a violation 44 of this section, notice thereof shall be served upon the attorney-gener- 45 al. Where the aggrieved party is a political subdivision or public 46 authority of the state, notice of intention to commence an action under 47 this section must be served upon the attorney-general at least ten days 48 prior to the commencement of such action. This section shall not apply 49 to any action commenced prior to the effective date of this act. 50 [6.] 7. In any action pursuant to this section, the fact that the 51 state, or any political subdivision or public authority of the state, or 52 any person who has sustained damages by reason of violation of this 53 section has not dealt directly with the defendant shall not bar or 54 otherwise limit recovery; provided, however, that in any action in which 55 claims are asserted against a defendant by both direct and indirect 56 purchasers, the court shall take all steps necessary to avoid duplicateS. 933--C 5 1 liability, including but not limited to the transfer and consolidation 2 of all related actions. In actions where both direct and indirect 3 purchasers are involved, a defendant shall be entitled to prove as a 4 partial or complete defense to a claim for damages that the illegal 5 overcharge has been passed on to others who are themselves entitled to 6 recover so as to avoid duplication of recovery of damages. 7 8. Any damages recoverable pursuant to this section may be recovered 8 in any action which a court may authorize to be brought as a class 9 action pursuant to article nine of the civil practice law and rules. 10 9. An arrangement, as this term is used in this article, includes, but 11 is not limited to, a contract, combination, agreement or conspiracy. 12 10. (a) Any person conducting business in the state which is required 13 to file the Notification and Report Form for Certain Mergers and Acqui- 14 sitions pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 15 1976, 15 U.S.C. s. 18a (a), shall provide the same notice and documenta- 16 tion in its entirety to the attorney general at the same time that 17 notice is filed with the federal government. 18 (b) The following classes of transactions are exempt from the 19 requirements of this section: 20 (i) acquisitions of goods or realty transferred in the ordinary course 21 of business; 22 (ii) the creation, production, and dissemination of a single expres- 23 sive work that is copyrighted, including but not limited to, a streaming 24 series, television programs and or motion pictures; 25 (iii) acquisitions of bonds, mortgages, deeds of trust, or other obli- 26 gations which are not voting securities; 27 (iv) transfers to or from a federal agency or a state or political 28 subdivision thereof; 29 (v) transactions specifically exempted from the provisions of this 30 article; and 31 (vi) such other acquisitions, transfers, or transactions, as may be 32 exempted under paragraph (f) of this subdivision hereunder. 33 (c) Any information or documentary material filed with the attorney 34 general pursuant to this subdivision shall be exempt from disclosure 35 under article six of the public officers law, and no such information or 36 documentary material may be made public, except as may be relevant to 37 any administrative or judicial action or proceeding. 38 (d) Any person, or any officer, director, or partner thereof, who 39 fails to comply with any provision of this subdivision shall be liable 40 to the state for a civil penalty of not more than ten thousand dollars 41 for each day during which such person is in violation of this section. 42 Such penalty may be recovered in a civil action brought by the attorney 43 general. 44 (e) In considering any transaction under this subdivision, the attor- 45 ney general shall consider such transaction's effects on labor markets. 46 (f) The attorney general is hereby empowered to: 47 (i) define the terms used in this subdivision; 48 (ii) exempt, from the requirements of this subdivision, classes of 49 persons, acquisitions, transfers, or transactions which are not likely 50 to violate the provisions of this article; and 51 (iii) adopt, promulgate, amend, and rescind other rules and regu- 52 lations to carry out the purposes of this subdivision. 53 § 4. Section 341 of the general business law, as amended by chapter 54 333 of the laws of 1975, is amended to read as follows: 55 § 341. Penalty. Every person or corporation, or any officer or agent 56 thereof, who shall [make or attempt to make or enter into any suchS. 933--C 6 1contract, agreement, arrangement or combination or who within this state2shall] do or attempt to do, within this state, any act [pursuant there-3to] declared unlawful under subdivision one and paragraph (a) of subdi- 4 vision two of section three hundred forty of this article, or in, toward 5 or for the consummation thereof[, wherever the same may have been made], 6 is guilty of a class [E] D felony, and on conviction thereof shall, if a 7 natural person, be punished by a fine not exceeding one [hundred thou-8sand] million dollars, or by imprisonment for not longer than four 9 years, or by both such fine and imprisonment; and if a corporation, by a 10 fine of not exceeding one hundred million dollars. An indictment or 11 information based on a violation of any of the provisions of this 12 section must be found within [three] five years after its commission. No 13 criminal proceeding barred by prior limitation shall be revived by this 14 act. 15 § 5. Section 342-a of the general business law, as amended by chapter 16 275 of the laws of 1962, is amended to read as follows: 17 § 342-a. Recovery of civil penalty by attorney-general. In lieu of any 18 penalty otherwise prescribed for a violation of a provision of this 19 article and in addition to an action pursuant to section three hundred 20 forty-two of this article, the attorney-general may bring an action in 21 the name and in behalf of the people of the state against any person, 22 trustee, director, manager or other officer or agent of a corporation, 23 or against a corporation, foreign or domestic, to recover a penalty in 24 the sum specified in section three hundred forty-one of this article for 25 the doing in this state of any act [herein] declared to be illegal in 26 this article, or any act in, toward or for the making or consummation of 27 any contract, agreement, arrangement or combination [herein] prohibited 28 by this article, wherever the same may have been made. The action must 29 be brought within [three] five years after the commission of the act 30 upon which it is based. 31 § 6. Section 342-b of the general business law, as amended by chapter 32 420 of the laws of 1975, is amended to read as follows: 33 § 342-b. Recovery of damages by attorney general. In addition to 34 existing statutory and common law authority to bring such actions on 35 behalf of the state, [and] public authorities, and resident persons and 36 entities, the attorney general may also bring action on behalf of any 37 political subdivision or public authority of the state upon the request 38 of such political subdivision or public authority, or in the name of the 39 state, as parens patriae, on behalf of persons and other entities resid- 40 ing in the state of New York, to recover damages for violations of 41 section three hundred forty of this article, or to recover damages 42 provided for by federal law for violations of the federal antitrust 43 laws. In any class action the attorney general may bring on behalf of 44 [these or other subordinate] governmental entities, any governmental 45 entity that does not affirmatively exclude itself from the action, upon 46 due notice thereof, shall be deemed to have requested to be treated as a 47 member of the class represented in that action. The attorney general, 48 on behalf of the state of New York, shall be entitled to retain from any 49 moneys recovered in such actions the costs and expenses of such 50 services. 51 § 7. The general business law is amended by adding a new section 342-d 52 to read as follows: 53 § 342-d. Recovery of expert witnesses' fees and costs by attorney-gen- 54 eral and private litigants. In any action alleging a violation of a 55 provision of this article, including actions brought under subdivision 56 twelve of section sixty-three of the executive law, the attorney generalS. 933--C 7 1 and private litigants shall recover reasonable fees and costs for its 2 expert witnesses and consultants if the attorney general or private 3 litigants prevail in such action. 4 § 8. Severability. If any provision of this act, or the application 5 thereof to any person or circumstances, is held invalid or unconstitu- 6 tional, that invalidity or unconstitutionality shall not affect other 7 provisions or applications of this act that can be given effect without 8 the invalid or unconstitutional provision or application, and to this 9 end the provisions of this act are severable. 10 § 9. This act shall take effect immediately.