Bill Text: NY S00933 | 2021-2022 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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
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--A 2021-2022 Regular Sessions IN SENATE (Prefiled) January 6, 2021 ___________ Introduced by Sens. GIANARIS, SALAZAR, 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 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 15 actions which seek to create a monopoly or monopsony are as harmful as 16 contracts or agreements of multiple parties to do the same and should be 17 treated similarly under the law. After monopolies or monopsonies have 18 been established, it is typically too late to repair or mitigate the 19 damage which has been done. Accordingly, mere attempts to create monopo- 20 lies or monopsonies through anti-competitive conduct should also be EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03654-05-1S. 933--A 2 1 treated as actions contrary to the interests of the people of the state 2 of New York and should be penalized accordingly. The legislature 3 further finds and declares that effective enforcement against unilateral 4 anti-competitive conduct has been impeded by courts, for example, apply- 5 ing narrow definitions of monopolies and monopolization, limiting the 6 scope of unilateral conduct covered by the federal anti-trust laws, and 7 unreasonably heightening the legal standards that plaintiffs must over- 8 come to establish violations of those laws. The legislature further 9 finds and declares that one of the purposes of the state's anti-trust 10 laws is to ensure that our labor markets are open and fair. The legisla- 11 ture further finds and declares that anti-competitive practices harm 12 great numbers of citizens and therefore must ensure that class actions 13 may be raised in anti-trust suits. 14 § 3. Section 340 of the general business law, as amended by chapter 12 15 of the laws of 1935, subdivision 1 as amended by chapter 893 of the laws 16 of 1957, subdivision 2 as amended by chapter 805 of the laws of 1984, 17 subdivisions 3 and 4 as renumbered by chapter 502 of the laws of 1948, 18 subdivision 5 as amended by chapter 333 of the laws of 1975 and subdivi- 19 sion 6 as amended by chapter 31 of the laws of 1999, is amended to read 20 as follows: 21 § 340. Contracts or agreements for monopoly, monopsony, or in 22 restraint of trade illegal and void. 1. Every contract, agreement, 23 arrangement or combination whereby 24 A monopoly or monopsony in the conduct of any business, trade or 25 commerce or in the furnishing of any service in this state, is or may be 26 established or maintained, or whereby 27 Competition or the free exercise of any activity in the conduct of any 28 business, trade or commerce or in the furnishing of any service in this 29 state is or may be restrained or whereby 30 For the purpose of [establishing or maintaining any such monopoly or31unlawfully interfering with the free exercise of any activity in the32conduct of any business, trade or commerce or in the furnishing of any33service in this state] engaging in the conduct specified in this section 34 any business, trade or commerce or the furnishing of any service is or 35 may be restrained, is hereby declared to be against public policy, ille- 36 gal and void. 37 2. (a) It shall be unlawful for any person or persons to monopolize or 38 monopsonize, or attempt to monopolize or monopsonize, or combine or 39 conspire with any other person or persons to monopolize or monopsonize 40 any business, trade or commerce or the furnishing of any service in this 41 state. 42 (b) It shall be unlawful for any person or persons with a dominant 43 position in the conduct of any business, trade or commerce, in any labor 44 market, or in the furnishing of any service in this state to abuse that 45 dominant position. 46 (i) In any action brought under this paragraph, a person's dominant 47 position may be established by direct evidence, indirect evidence, or a 48 combination of the two. 49 (1) Direct evidence may include, but is not limited to, the unilateral 50 power to set prices, terms, conditions, or standards; the unilateral 51 power to dictate non-price contractual terms without compensation; or 52 other evidence that a person is not constrained by meaningful compet- 53 itive pressures, such as the ability to degrade quality without suffer- 54 ing reduction in profitability. In labor markets, direct evidence of a 55 dominant position may include, but is not limited to, the use of non-S. 933--A 3 1 compete clauses or no-poach agreements, or the unilateral power to set 2 wages. 3 (2) A person's dominant position may also be established by indirect 4 evidence such as the person's share of a relevant market. A person who 5 has a share of forty percent or greater of a relevant market as a seller 6 shall be presumed to have a dominant position in that market under this 7 paragraph. A person who has a share of thirty percent or greater of a 8 relevant market as a buyer shall be presumed to have a dominant position 9 in that market under this paragraph. 10 (3) If direct evidence is sufficient to demonstrate that a person has 11 a dominant position or has abused such a dominant position, no court 12 shall require definition of a relevant market in order to evaluate the 13 evidence, find liability, or find that a claim has been stated under 14 this paragraph. 15 (ii) In any action brought under this paragraph, abuse of a dominant 16 position may include, but is not limited to, conduct that tends to fore- 17 close or limit the ability or incentive of one or more actual or poten- 18 tial competitors to compete, such as leveraging a dominant position in 19 one market to limit competition in a separate market, or refusing to 20 deal with another person with the effect of unnecessarily excluding or 21 handicapping actual or potential competitors. In labor markets, abuse 22 may include, but is not limited to, imposing contracts by which any 23 person is restrained from engaging in a lawful profession, trade, or 24 business of any kind, or restricting the freedom of workers and inde- 25 pendent contractors to disclose wage and benefit information. 26 (iii) Evidence of pro-competitive effects shall not be a defense to 27 abuse of dominance and shall not offset or cure competitive harm. 28 (c) (i) The attorney general is hereby empowered to adopt, promulgate, 29 amend, and repeal rules, as such term is defined in paragraph (a) of 30 subdivision two of section one hundred two of the state administrative 31 procedure act, to carry out the purposes of paragraph (b) of this subdi- 32 vision, including those considerations specified in the findings and 33 declarations of the legislature for this act. 34 (ii) Before any such rule shall take effect, at such time that the 35 attorney general is prepared to file a notice of adoption pursuant to 36 subdivision five of section two hundred two of the state administrative 37 procedure act, the attorney general shall transmit a copy of the rule in 38 its final form to the temporary president of the senate and the speaker 39 of the assembly and, in addition, shall provide any relevant information 40 regarding the need for such rule. Such proposed rule, or proposed repeal 41 of a rule, is subject to the denial by either house of the legislature 42 and shall take the form of a resolution. Each house of the legislature 43 shall have sixty days following the transmission of such rule to issue 44 denial by resolution or take no action. Such rule shall not take effect 45 if either house passes a resolution denying such proposed rule within 46 the time prescribed by this subparagraph. 47 (iii) The attorney general shall issue guidance on how it will inter- 48 pret market shares and other relevant market conditions to achieve the 49 purposes of paragraph (b) of this subdivision while taking into account 50 the important role of small and medium-sized businesses in the state's 51 economy. The attorney general may issue other guidance with respect to 52 paragraph (b) of this subdivision. 53 3. Subject to the exceptions hereinafter provided in this section, the 54 provisions of this article shall apply to licensed insurers, licensed 55 insurance agents, licensed insurance brokers, licensed independent 56 adjusters and other persons and organizations subject to the provisionsS. 933--A 4 1 of the insurance law, to the extent not regulated by provisions of arti- 2 cle twenty-three of the insurance law; and further provided, that noth- 3 ing in this section shall apply to the marine insurances, including 4 marine protection and indemnity insurance and marine reinsurance, 5 exempted from the operation of article twenty-three of the insurance 6 law. 7 [3.] 4. The provisions of this article shall not apply to cooperative 8 associations, corporate or otherwise, of farmers, gardeners, or dairy- 9 men, including live stock farmers and fruit growers, nor to contracts, 10 agreements or arrangements made by such associations, nor to bona fide 11 labor unions. 12 [4.] 5. The labor of human beings shall not be deemed or held to be a 13 commodity or article of commerce as such terms are used in this section 14 and nothing herein contained shall be deemed to prohibit or restrict the 15 right of workingmen, including employees and independent contractors, to 16 combine in unions, organizations and associations, not organized for the 17 purpose of profit, or to bargain collectively concerning their wages and 18 the terms and conditions of their employment. A bona fide collective 19 bargaining agreement, or any term therein, shall not be considered 20 evidence of a violation or dominance under this section. 21 [5.] 6. An action to recover damages caused by a violation of this 22 section must be commenced within four years after the cause of action 23 has accrued. The state, or any political subdivision or public authority 24 of the state, or any person who shall sustain damages by reason of any 25 violation of this section, shall recover three-fold the actual damages 26 sustained thereby, as well as costs not exceeding ten thousand dollars, 27 and reasonable attorneys' fees. At or before the commencement of any 28 civil action by a party other than the attorney-general for a violation 29 of this section, notice thereof shall be served upon the attorney-gener- 30 al. Where the aggrieved party is a political subdivision or public 31 authority of the state, notice of intention to commence an action under 32 this section must be served upon the attorney-general at least ten days 33 prior to the commencement of such action. This section shall not apply 34 to any action commenced prior to the effective date of this act. 35 [6.] 7. In any action pursuant to this section, the fact that the 36 state, or any political subdivision or public authority of the state, or 37 any person who has sustained damages by reason of violation of this 38 section has not dealt directly with the defendant shall not bar or 39 otherwise limit recovery; provided, however, that in any action in which 40 claims are asserted against a defendant by both direct and indirect 41 purchasers, the court shall take all steps necessary to avoid duplicate 42 liability, including but not limited to the transfer and consolidation 43 of all related actions. In actions where both direct and indirect 44 purchasers are involved, a defendant shall be entitled to prove as a 45 partial or complete defense to a claim for damages that the illegal 46 overcharge has been passed on to others who are themselves entitled to 47 recover so as to avoid duplication of recovery of damages. 48 8. Any damages recoverable pursuant to this section may be recovered 49 in any action which a court may authorize to be brought as a class 50 action pursuant to article nine of the civil practice law and rules. 51 9. An arrangement, as this term is used in this article, includes, but 52 is not limited to, a contract, combination, agreement or conspiracy. 53 10. Premerger notification. 54 (a) Any person acquiring, directly or indirectly, any voting securi- 55 ties or assets of any other person, shall file notification with theS. 933--A 5 1 attorney general pursuant to rules under paragraph (h) of this subdivi- 2 sion hereunder if: 3 (i) as a result of such acquisition, the acquiring person would hold 4 an aggregate total amount of the voting securities and assets of the 5 acquired person in excess of ten per centum of the current thresholds 6 specified by the United States Federal Trade Commission pursuant to 15 7 U.S.C. § 18a(a)(2); and 8 (ii) the acquiring or acquired person has assets or annual net sales 9 within the state in excess of two and one-half per centum of the current 10 thresholds specified by the United States Federal Trade Commission 11 pursuant to 15 U.S.C. § 18a(a)(2)(A). 12 (b) The notification required under paragraph (a) of this subdivision 13 shall be filed no later than sixty calendar days before the closing of 14 the acquisition. 15 (c) The notification required under paragraph (a) of this subdivision 16 shall identify: 17 (i) All parties to the acquisition. 18 (ii) The assets being transferred in the acquisition. 19 (iii) The anticipated closing date of the acquisition. 20 (iv) Persons subject to the requirements of this paragraph who file a 21 notification with the United States department of justice and the United 22 States federal trade commission pursuant to 15 U.S.C. § 18a et seq. 23 shall comply with the requirements of this subdivision by filing with 24 the attorney general the same materials filed with the aforementioned 25 federal agencies, at the same time that they file those materials with 26 those federal agencies. 27 (d) The following classes of transactions are exempt from the 28 requirements of this section: 29 (i) acquisitions of goods or realty transferred in the ordinary course 30 of business; 31 (ii) acquisitions of bonds, mortgages, deeds of trust, or other obli- 32 gations which are not voting securities; 33 (iii) transfers to or from a federal agency or a state or political 34 subdivision thereof; 35 (iv) transactions specifically exempted from the provisions of this 36 article; and 37 (v) such other acquisitions, transfers, or transactions, as may be 38 exempted under paragraph (h) of this subdivision hereunder. 39 (e) Any information or documentary material filed with the attorney 40 general pursuant to this subdivision shall be exempt from disclosure 41 under article six of the public officers law, and no such information or 42 documentary material may be made public, except as may be relevant to 43 any administrative or judicial action or proceeding. 44 (f) Any person, or any officer, director, or partner thereof, who 45 fails to comply with any provision of this subdivision shall be liable 46 to the state for a civil penalty of not more than ten thousand dollars 47 for each day during which such person is in violation of this section. 48 Such penalty may be recovered in a civil action brought by the attorney 49 general. 50 (g) In considering any transaction under this subdivision, the attor- 51 ney general shall consider such transaction's effects on labor markets. 52 (h) The attorney general is hereby empowered to: 53 (i) define the terms used in this subdivision; 54 (ii) exempt, from the requirements of this subdivision, classes of 55 persons, acquisitions, transfers, or transactions which are not likely 56 to violate the provisions of this article; andS. 933--A 6 1 (iii) adopt, promulgate, amend, and rescind other rules and regu- 2 lations to carry out the purposes of this subdivision. 3 § 4. Section 341 of the general business law, as amended by chapter 4 333 of the laws of 1975, is amended to read as follows: 5 § 341. Penalty. Every person or corporation, or any officer or agent 6 thereof, who shall [make or attempt to make or enter into any such7contract, agreement, arrangement or combination or who within this state8shall] do or attempt to do, within this state, any act [pursuant there-9to] declared unlawful under subdivision one and paragraph (a) of subdi- 10 vision two of section three hundred forty of this article, or in, toward 11 or for the consummation thereof[, wherever the same may have been made], 12 is guilty of a class [E] D felony, and on conviction thereof shall, if a 13 natural person, be punished by a fine not exceeding one [hundred thou-14sand] million dollars, or by imprisonment for not longer than four 15 years, or by both such fine and imprisonment; and if a corporation, by a 16 fine of not exceeding one hundred million dollars. An indictment or 17 information based on a violation of any of the provisions of this 18 section must be found within [three] five years after its commission. No 19 criminal proceeding barred by prior limitation shall be revived by this 20 act. 21 § 5. Section 342-a of the general business law, as amended by chapter 22 275 of the laws of 1962, is amended to read as follows: 23 § 342-a. Recovery of civil penalty by attorney-general. In lieu of any 24 penalty otherwise prescribed for a violation of a provision of this 25 article and in addition to an action pursuant to section three hundred 26 forty-two of this article, the attorney-general may bring an action in 27 the name and in behalf of the people of the state against any person, 28 trustee, director, manager or other officer or agent of a corporation, 29 or against a corporation, foreign or domestic, to recover a penalty in 30 the sum specified in section three hundred forty-one of this article for 31 the doing in this state of any act [herein] declared to be illegal in 32 this article, or any act in, toward or for the making or consummation of 33 any contract, agreement, arrangement or combination [herein] prohibited 34 by this article, wherever the same may have been made. The action must 35 be brought within [three] five years after the commission of the act 36 upon which it is based. 37 § 6. Section 342-b of the general business law, as amended by chapter 38 420 of the laws of 1975, is amended to read as follows: 39 § 342-b. Recovery of damages by attorney general. In addition to 40 existing statutory and common law authority to bring such actions on 41 behalf of the state, [and] public authorities, and resident persons and 42 entities, the attorney general may also bring action on behalf of any 43 political subdivision or public authority of the state upon the request 44 of such political subdivision or public authority, or in the name of the 45 state, as parens patriae, on behalf of persons and other entities resid- 46 ing in the state of New York, to recover damages for violations of 47 section three hundred forty of this article, or to recover damages 48 provided for by federal law for violations of the federal antitrust 49 laws. In any class action the attorney general may bring on behalf of 50 [these or other subordinate] governmental entities, any governmental 51 entity that does not affirmatively exclude itself from the action, upon 52 due notice thereof, shall be deemed to have requested to be treated as a 53 member of the class represented in that action. The attorney general, 54 on behalf of the state of New York, shall be entitled to retain from any 55 moneys recovered in such actions the costs and expenses of such 56 services.S. 933--A 7 1 § 7. The general business law is amended by adding a new section 342-d 2 to read as follows: 3 § 342-d. Recovery of expert witnesses' fees and costs by attorney-gen- 4 eral and private litigants. In any action alleging a violation of a 5 provision of this article, including actions brought under subdivision 6 twelve of section sixty-three of the executive law, the attorney general 7 and private litigants shall recover reasonable fees and costs for its 8 expert witnesses and consultants if the attorney general or private 9 litigants prevail in such action. 10 § 8. This act shall take effect immediately.
